FERG vs WSO

For growth investors, Ferguson plc (FERG) is the stronger pick with 3.

8% revenue growth year-over-year, versus -5. 0% for Watsco, Inc. (WSO). Ferguson plc (FERG) offers the better valuation at 26. 5x trailing P/E (22. 1x forward), making it the more compelling value choice. Analysts rate Ferguson plc (FERG) a "Buy" — based on 14 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, Ferguson plc (FERG) is the cheapest at 26.

5x versus Watsco, Inc. at 35. 0x. On forward P/E, Ferguson plc is actually cheaper at 22. 1x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Ferguson plc wins at 1. 30x versus Watsco, Inc. 's 2. 88x — a reasonable growth-adjusted valuation.

Over the past 5 years, Ferguson plc (FERG) delivered a total return of +97.

7%, compared to +59. 8% for Watsco, Inc. (WSO). Over 10 years, the gap is even starker: FERG returned +373. 2% versus WSO's +281. 5%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), Watsco, Inc.

(WSO) is the lower-risk stock at 1. 10β versus Ferguson plc's 1. 24β — meaning FERG is approximately 12% more volatile than WSO relative to the S&P 500. On balance sheet safety, Watsco, Inc. (WSO) carries a lower debt/equity ratio of 15% versus 102% for Ferguson plc — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), Ferguson plc (FERG) is pulling ahead at 3.

8% versus -5. 0% for Watsco, Inc. (WSO). On earnings-per-share growth, the picture is similar: Ferguson plc grew EPS 9. 3% year-over-year, compared to -7. 9% for Watsco, Inc.. Over a 3-year CAGR, FERG leads at 2. 5% annualised revenue growth. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

Watsco, Inc.

(WSO) is the more profitable company, earning 6. 9% net margin versus 6. 0% for Ferguson plc — meaning it keeps 6. 9% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: WSO leads at 9. 6% versus 8. 5% for FERG. At the gross margin level — before operating expenses — FERG leads at 30. 7%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential.

By this metric, Ferguson plc (FERG) is the more undervalued stock at a PEG of 1. 30x versus Watsco, Inc. 's 2. 88x. A PEG below 1. 5 suggests fair-to-attractive pricing relative to expected growth. On forward earnings alone, Ferguson plc (FERG) trades at 22. 1x forward P/E versus 34. 0x for Watsco, Inc. — 11. 9x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for FERG: 9. 9% to $271. 00.

All stocks in this comparison pay dividends.

Watsco, Inc. (WSO) offers the highest yield at 2. 9%, versus 1. 0% for Ferguson plc (FERG).

For long-horizon retirement investors, Watsco, Inc.

(WSO) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 1. 10), 2. 9% yield, +281. 5% 10Y return). Both have compounded well over 10 years (WSO: +281. 5%, FERG: +373. 2%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

Both stocks operate in the Industrials sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both.

These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.