Watsco, Inc. (WSO) 10-Year Financial Performance & Capital Metrics

WSO • • Industrial / General

IndustrialsIndustrial DistributionSpecialized Infrastructure DistributionPlumbing & HVAC Distributors

AboutWatsco, Inc., together with its subsidiaries, distributes air conditioning, heating, refrigeration equipment, and related parts and supplies. The company distributes equipment comprising residential ducted and ductless air conditioners, such as gas, electric, and oil furnaces; commercial air conditioning and heating equipment systems; and other specialized equipment. It also offers parts, including replacement compressors, evaporator coils, motors, and other component parts; and supplies, such as thermostats, insulation materials, refrigerants, ductworks, grills, registers, sheet metals, tools, copper tubing, concrete pads, tapes, adhesives, and other ancillary supplies, as well as plumbing and bathroom remodeling supplies. The company serves contractors and dealers that service the replacement and new construction markets for residential and light commercial central air conditioning, heating, and refrigeration systems. As of December 31, 2021, it operated from 671 locations in the United States, Canada, Mexico, and Puerto Rico, as well as exports its products to Latin America and the Caribbean Basin. Watsco, Inc. was founded in 1945 and is headquartered in Miami, Florida.Show more

Revenue $7.62B +4.6%
EBITDA $823M -0.9%
Net Income $536M
EPS (Diluted) 13.30 -2.7%
Gross Margin 26.84% -1.9%
EBITDA Margin 10.8% -5.2%
Operating Margin 10.26% -6.0%
Net Margin 7.04% -4.4%
ROE 18.88% -14.4%
ROIC 19.89% -9.9%
Debt/Equity 0.15 -24.4%
Interest Coverage -

Technical Analysis

Key Insights

Based on financial data analysis

✓Strengths

✓Excellent 3Y average ROE of 23.1%
✓Strong 5Y profit CAGR of 16.9%
✓11 consecutive years of dividend growth
✓High quality earnings: Operating CF exceeds net income
✓Healthy dividend yield of 3.0%
✓Efficient asset utilization: 1.7x turnover

✗Weaknesses

No significant weaknesses identified

Price & Volume

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Growth Metrics

Revenue CAGR

10Y6.8%

5Y9.81%

3Y6.65%

TTM-0.71%

Profit (Net Income) CAGR

10Y13.48%

5Y16.87%

3Y8.58%

TTM5.32%

EPS CAGR

10Y12.77%

5Y15.4%

3Y7.25%

TTM-0.08%

ROCE

10Y Avg24.18%

5Y Avg26.87%

3Y Avg28.62%

Latest23.81%

Peer Comparison

Plumbing & HVAC Distributors

Name	Market Cap	Current Price	P/E Ratio	Revenue Growth 1Y	Net Margin	ROE	FCF Yield	Debt/Equity
WSOWatsco, Inc.	13.27B	380.10	28.58	4.59%	7.41%	16.65%	5.6%	0.15
FERGFerguson plc	50.14B	249.86	26.81	3.8%	6.28%	32.3%	3.2%	1.02

Profit & Loss

	Dec 2015	Dec 2016	Dec 2017	Dec 2018	Dec 2019	Dec 2020	Dec 2021	Dec 2022	Dec 2023	Dec 2024
Sales/Revenue+	4.11B	4.22B	4.34B	4.55B	4.77B	5.05B	6.28B	7.27B	7.28B	7.62B
Revenue Growth %	0.04%	0.03%	0.03%	0.05%	0.05%	0.06%	0.24%	0.16%	0%	0.05%
Cost of Goods Sold+	3.11B	3.19B	3.28B	3.43B	3.61B	3.83B	4.61B	5.24B	5.29B	5.57B
COGS % of Revenue	0.76%	0.75%	0.75%	0.75%	0.76%	0.76%	0.73%	0.72%	0.73%	0.73%
Gross Profit+	1.01B	1.03B	1.07B	1.12B	1.16B	1.22B	1.67B	2.03B	1.99B	2.04B
Gross Margin %	0.24%	0.25%	0.25%	0.25%	0.24%	0.24%	0.27%	0.28%	0.27%	0.27%
Gross Profit Growth %	0.05%	0.03%	0.03%	0.05%	0.03%	0.06%	0.36%	0.22%	-0.02%	0.03%
Operating Expenses+	670.61M	688.95M	711.78M	748.17M	790.07M	821.79M	1.04B	1.2B	1.2B	1.26B
OpEx % of Revenue	0.16%	0.16%	0.16%	0.16%	0.17%	0.16%	0.17%	0.16%	0.16%	0.17%
Selling, General & Admin	670.61M	688.95M	715.67M	757.45M	800.33M	833.05M	1.06B	1.22B	1.22B	1.26B
SG&A % of Revenue	0.16%	0.16%	0.16%	0.17%	0.17%	0.16%	0.17%	0.17%	0.17%	0.16%
Research & Development	0	0	0	0	0	0	0	0	0	0
R&D % of Revenue	-	-	-	-	-	-	-	-	-	-
Other Operating Expenses	0	0	-3.89M	-9.28M	-10.26M	-11.26M	-19.3M	-22.67M	-26.18M	7.09M
Operating Income+	336.75M	345.63M	353.87M	372.08M	366.88M	401.03M	628.53M	831.58M	794.81M	781.77M
Operating Margin %	0.08%	0.08%	0.08%	0.08%	0.08%	0.08%	0.1%	0.11%	0.11%	0.1%
Operating Income Growth %	0.1%	0.03%	0.02%	0.05%	-0.01%	0.09%	0.57%	0.32%	-0.04%	-0.02%
EBITDA+	355.87M	365.7M	375.91M	394.18M	391.4M	426.94M	656.65M	863.26M	829.9M	822.6M
EBITDA Margin %	0.09%	0.09%	0.09%	0.09%	0.08%	0.08%	0.1%	0.12%	0.11%	0.11%
EBITDA Growth %	0.1%	0.03%	0.03%	0.05%	-0.01%	0.09%	0.54%	0.31%	-0.04%	-0.01%
D&A (Non-Cash Add-back)	19.12M	20.07M	22.03M	22.09M	24.51M	25.91M	28.13M	31.68M	35.09M	40.82M
EBIT	336.75M	345.63M	353.87M	372.08M	366.88M	401.03M	628.53M	808.91M	768.63M	751.27M
Net Interest Income+	-5.55M	-3.71M	-6.36M	-2.74M	-4.03M	-1.24M	-996K	-2.17M	-4.92M	20.87M
Interest Income	0	0	0	0	0	0	0	0	0	0
Interest Expense	5.55M	3.71M	6.36M	2.74M	4.03M	1.24M	996K	2.17M	4.92M	-20.87M
Other Income/Expense	-5.55M	-3.71M	-6.36M	-2.74M	-4.03M	-1.24M	-996K	-2.17M	-4.92M	20.87M
Pretax Income+	331.2M	341.92M	347.51M	369.34M	362.85M	399.8M	627.53M	829.41M	789.89M	802.64M
Pretax Margin %	0.08%	0.08%	0.08%	0.08%	0.08%	0.08%	0.1%	0.11%	0.11%	0.11%
Income Tax+	104.68M	105.94M	90.22M	72.81M	67.08M	76.62M	128.8M	125.72M	155.75M	166.9M
Effective Tax Rate %	0.52%	0.53%	0.6%	0.66%	0.68%	0.67%	0.67%	0.72%	0.68%	0.67%
Net Income+	172.93M	182.81M	208.22M	242.93M	245.95M	269.58M	418.94M	601.17M	536.34M	536.29M
Net Margin %	0.04%	0.04%	0.05%	0.05%	0.05%	0.05%	0.07%	0.08%	0.07%	0.07%
Net Income Growth %	0.14%	0.06%	0.14%	0.17%	0.01%	0.1%	0.55%	0.43%	-0.11%	-0%
Net Income (Continuing)	226.52M	235.98M	257.29M	296.53M	295.77M	323.17M	498.74M	703.7M	634.14M	635.74M
Discontinued Operations	0	0	0	0	0	0	0	0	0	0
Minority Interest	246.41M	245.92M	253.02M	253.86M	279.34M	293.08M	332.47M	359.04M	386.35M	407.25M
EPS (Diluted)+	4.51	4.73	5.12	6.48	6.50	7.01	10.78	15.41	13.67	13.30
EPS Growth %	0.13%	0.05%	0.08%	0.27%	0%	0.08%	0.54%	0.43%	-0.11%	-0.03%
EPS (Basic)	4.51	4.73	5.12	6.48	6.51	7.03	10.83	15.46	13.67	13.34
Diluted Shares Outstanding	35.31M	35.53M	37.23M	37.46M	34.68M	35.15M	35.42M	35.68M	36.53M	37.51M
Basic Shares Outstanding	35.31M	35.53M	37.23M	37.46M	34.64M	35.07M	35.24M	35.56M	36.53M	37.51M
Dividend Payout Ratio	0.57%	0.7%	0.79%	0.86%	0.98%	0.99%	0.7%	0.55%	0.71%	0.79%

Balance Sheet

	Dec 2015	Dec 2016	Dec 2017	Dec 2018	Dec 2019	Dec 2020	Dec 2021	Dec 2022	Dec 2023	Dec 2024
Total Current Assets+	1.18B	1.24B	1.34B	1.44B	1.55B	1.48B	1.96B	2.3B	2.39B	3.08B
Cash & Short-Term Investments	35.23M	56.01M	80.5M	82.89M	74.45M	146.07M	118.27M	147.5M	210.11M	781.94M
Cash Only	35.23M	56.01M	80.5M	82.89M	74.45M	146.07M	118.27M	147.5M	210.11M	526.27M
Short-Term Investments	0	0	0	0	0	0	0	0	0	255.67M
Accounts Receivable	451.08M	475.97M	478.13M	501.91M	533.81M	535.29M	698.46M	747.11M	797.83M	877.93M
Days Sales Outstanding	40.03	41.16	40.19	40.29	40.84	38.65	40.59	37.49	39.98	42.06
Inventory	673.97M	685.01M	761.31M	837.13M	920.79M	781.3M	1.12B	1.37B	1.35B	1.39B
Days Inventory Outstanding	79.2	78.47	84.82	89.18	93.01	74.42	88.27	95.37	92.93	90.73
Other Current Assets	20.99M	23.16M	17.45M	19.88M	17.68M	21.79M	29.21M	33.95M	36.7M	34.67M
Total Non-Current Assets+	607.18M	634.49M	709.48M	719.23M	1.01B	999.9M	1.12B	1.19B	1.34B	1.45B
Property, Plant & Equipment	62.72M	90.5M	91.2M	91.05M	321.89M	307.39M	379.55M	442.74M	504.98M	559.67M
Fixed Asset Turnover	65.59x	46.64x	47.61x	49.94x	14.82x	16.44x	16.55x	16.43x	14.42x	13.61x
Goodwill	378.31M	379.74M	382.73M	392M	411.22M	412.49M	434.02M	430.71M	457.15M	451.86M
Intangible Assets	160.48M	158.56M	161.06M	147.85M	172M	169.93M	186.9M	175.19M	218.15M	208.47M
Long-Term Investments	0	0	0	80.16M	94.83M	97.85M	114.81M	132.8M	146.24M	171.19M
Other Non-Current Assets	5.67M	5.69M	74.49M	8.18M	9.48M	12.25M	9.19M	8.03M	10.74M	8.35M
Total Assets+	1.79B	1.87B	2.05B	2.16B	2.56B	2.48B	3.09B	3.49B	3.73B	4.53B
Asset Turnover	2.30x	2.25x	2.12x	2.10x	1.87x	2.03x	2.04x	2.09x	1.95x	1.68x
Asset Growth %	-0%	0.05%	0.09%	0.06%	0.18%	-0.03%	0.24%	0.13%	0.07%	0.22%
Total Current Liabilities+	270.3M	314.89M	416.48M	357.57M	461.72M	487.14M	726.72M	906.52M	712.01M	983.9M
Accounts Payable	145.16M	185.48M	230.48M	200.23M	239.67M	251.55M	364.19M	456.13M	369.4M	490.88M
Days Payables Outstanding	17.06	21.25	25.68	21.33	24.21	23.96	28.82	31.75	25.48	32.15
Short-Term Debt	184K	200K	244K	246K	69.42M	71.8M	84.5M	56.4M	100.27M	0
Deferred Revenue (Current)	0	0	0	0	0	0	0	0	0	0
Other Current Liabilities	0	0	0	0	0	0	-84.5M	0	-100.27M	0
Current Ratio	4.37x	3.94x	3.21x	4.03x	3.35x	3.05x	2.70x	2.54x	3.36x	3.13x
Quick Ratio	1.88x	1.76x	1.38x	1.69x	1.36x	1.44x	1.16x	1.02x	1.47x	1.72x
Cash Conversion Cycle	102.17	98.39	99.33	108.14	109.65	89.11	100.04	101.11	107.43	100.64
Total Non-Current Liabilities+	314.42M	308.01M	79.42M	201.75M	379.68M	217.44M	361.72M	333.41M	400.98M	484.13M
Long-Term Debt	245.81M	235.64M	22.09M	135.75M	155.7M	0	89M	0	15.4M	0
Capital Lease Obligations	0	0	0	0	156.28M	144.34M	196.21M	243.53M	289.13M	337.19M
Deferred Tax Liabilities	68.61M	72.37M	57.34M	66M	67.7M	73.1M	76.51M	89.88M	96.45M	140.24M
Other Non-Current Liabilities	0	0	0	0	0	0	0	0	0	6.69M
Total Liabilities	584.72M	622.9M	495.9M	559.32M	841.39M	704.59M	1.09B	1.24B	1.11B	1.47B
Total Debt+	246M	235.84M	22.33M	136M	381.4M	216.14M	454.21M	390.53M	505.06M	447.46M
Net Debt	210.77M	179.83M	-58.17M	53.1M	306.95M	70.08M	335.95M	243.02M	294.94M	-78.81M
Debt / Equity	0.20x	0.19x	0.01x	0.08x	0.22x	0.12x	0.23x	0.17x	0.19x	0.15x
Debt / EBITDA	0.69x	0.64x	0.06x	0.35x	0.97x	0.51x	0.69x	0.45x	0.61x	0.54x
Net Debt / EBITDA	0.59x	0.49x	-0.15x	0.13x	0.78x	0.16x	0.51x	0.28x	0.36x	-0.10x
Interest Coverage	60.71x	93.09x	55.61x	135.80x	90.99x	323.68x	631.05x	384.10x	161.55x	-
Total Equity+	1.2B	1.25B	1.55B	1.6B	1.71B	1.78B	2B	2.25B	2.62B	3.06B
Equity Growth %	0.06%	0.04%	0.24%	0.03%	0.07%	0.04%	0.12%	0.13%	0.16%	0.17%
Book Value per Share	34.09	35.23	41.66	42.76	49.45	50.63	56.39	63.01	71.61	81.69
Total Shareholders' Equity	957.31M	1.01B	1.3B	1.35B	1.44B	1.49B	1.66B	1.89B	2.23B	2.66B
Common Stock	20.84M	20.95M	21.05M	21.17M	21.53M	21.7M	21.84M	21.81M	22.13M	22.22M
Retained Earnings	495.28M	550.48M	594.56M	627.97M	632.51M	636.37M	760.8M	1.03B	1.18B	1.3B
Treasury Stock	-114.42M	-114.42M	-87.44M	-87.44M	-87.44M	-87.44M	-87.44M	-87.44M	-86.63M	-73.48M
Accumulated OCI	-46.9M	-43.53M	-34.22M	-45.97M	-39.05M	-34.87M	-34.18M	-47.71M	-42.33M	-59.89M
Minority Interest	246.41M	245.92M	253.02M	253.86M	279.34M	293.08M	332.47M	359.04M	386.35M	407.25M

Cash Flow

	Dec 2015	Dec 2016	Dec 2017	Dec 2018	Dec 2019	Dec 2020	Dec 2021	Dec 2022	Dec 2023	Dec 2024
Cash from Operations+	221.38M	277.76M	301.85M	170.56M	335.77M	534.38M	349.57M	571.96M	561.95M	773.1M
Operating CF Margin %	0.05%	0.07%	0.07%	0.04%	0.07%	0.11%	0.06%	0.08%	0.08%	0.1%
Operating CF Growth %	0.53%	0.25%	0.09%	-0.43%	0.97%	0.59%	-0.35%	0.64%	-0.02%	0.38%
Net Income	226.52M	235.98M	257.29M	296.53M	295.77M	323.17M	498.74M	703.7M	634.14M	635.74M
Depreciation & Amortization	19.12M	20.07M	22.03M	22.09M	24.51M	25.91M	28.13M	31.68M	35.09M	40.82M
Stock-Based Compensation	12.6M	12.32M	13.29M	15.51M	17.03M	22.13M	25.36M	28.82M	30M	35.02M
Deferred Taxes	4.69M	2.72M	-10.73M	8.29M	1.28M	40K	5.94M	13.47M	-7.18M	229K
Other Non-Cash Items	1.74M	5.65M	648K	-3.69M	-2.62M	-4.02M	-6.91M	-9.01M	-10.3M	-16.95M
Working Capital Changes	-43.28M	1.02M	19.32M	-168.17M	-207K	167.15M	-201.69M	-196.69M	-119.8M	78.23M
Change in Receivables	-26.12M	-26.94M	-1.68M	-28.83M	8.46M	-3.56M	-130.41M	-60.15M	-36.03M	-85.56M
Change in Inventory	-3.65M	-9.73M	-73.4M	-78.95M	-15.53M	139.93M	-243.66M	-259.86M	64.62M	-41.68M
Change in Payables	-285K	-2.07M	95.28M	-57.4M	12.73M	33.94M	182.82M	121.99M	-162.04M	197.76M
Cash from Investing+	-22.94M	-42.83M	-81.31M	-26.31M	-81.04M	-16.34M	-148.58M	-33.84M	-41.34M	-290.67M
Capital Expenditures	-23.7M	-43.58M	-17.88M	-17.15M	-17.8M	-16.44M	-25.46M	-35.65M	-35.48M	-30.09M
CapEx % of Revenue	0.01%	0.01%	0%	0%	0%	0%	0%	0%	0%	0%
Acquisitions	-	-	-	-	-	-	-	-	-	-
Investments	-	-	-	-	-	-	-	-	-	-
Other Investing	760K	744K	168K	228K	1.38M	94K	1.36M	1.86M	1.31M	262K
Cash from Financing+	-187.78M	-217.89M	-202.15M	-139.6M	-264.02M	-448.49M	-228.6M	-503.96M	-460.08M	-158.53M
Debt Issued (Net)	-	-	-	-	-	-	-	-	-	-
Equity Issued (Net)	-	-	-	-	-	-	-	-	-	-
Dividends Paid	-98.53M	-127.6M	-164.15M	-209.22M	-241.41M	-265.71M	-294.52M	-332.45M	-382.65M	-423.52M
Share Repurchases	-	-	-	-	-	-	-	-	-	-
Other Financing	-37.33M	-81.81M	-72.8M	-46.86M	-53.68M	-42.6M	-40.96M	-48.76M	-44.74M	44.31M
Net Change in Cash	-	-	-	-	-	-	-	-	-	-
Free Cash Flow+	199.15M	238.15M	288.64M	153.4M	317.97M	517.94M	324.1M	536.31M	526.48M	743.01M
FCF Margin %	0.05%	0.06%	0.07%	0.03%	0.07%	0.1%	0.05%	0.07%	0.07%	0.1%
FCF Growth %	0.61%	0.2%	0.21%	-0.47%	1.07%	0.63%	-0.37%	0.65%	-0.02%	0.41%
FCF per Share	5.64	6.70	7.75	4.09	9.17	14.73	9.15	15.03	14.41	19.81
FCF Conversion (FCF/Net Income)	1.28x	1.52x	1.45x	0.70x	1.37x	1.98x	0.83x	0.95x	1.05x	1.44x
Interest Paid	0	0	0	0	0	1.84M	913K	3.5M	10.12M	969K
Taxes Paid	0	0	0	0	0	70.89M	124.98M	105.74M	188.44M	124.6M

Key Ratios

Metric	2015	2016	2017	2018	2019	2020	2021	2022	2023	2024
Return on Equity (ROE)	14.81%	14.89%	14.86%	15.41%	14.83%	15.43%	22.18%	28.32%	22.05%	18.88%
Return on Invested Capital (ROIC)	17.87%	18.22%	18.15%	17.73%	14.97%	15.54%	22.54%	25.85%	22.07%	19.89%
Gross Margin	24.49%	24.51%	24.54%	24.64%	24.25%	24.19%	26.55%	27.91%	27.35%	26.84%
Net Margin	4.2%	4.33%	4.8%	5.34%	5.16%	5.33%	6.67%	8.26%	7.36%	7.04%
Debt / Equity	0.20x	0.19x	0.01x	0.08x	0.22x	0.12x	0.23x	0.17x	0.19x	0.15x
Interest Coverage	60.71x	93.09x	55.61x	135.80x	90.99x	323.68x	631.05x	384.10x	161.55x	-
FCF Conversion	1.28x	1.52x	1.45x	0.70x	1.37x	1.98x	0.83x	0.95x	1.05x	1.44x
Revenue Growth	4.28%	2.61%	2.87%	4.71%	4.92%	5.97%	24.24%	15.83%	0.13%	4.59%

Revenue by Geography

	2015	2016	2017	2018	2019	2020	2021	2022	2023	2024
UNITED STATES	3.71B	3.81B	3.92B	4.13B	4.18B	4.54B	5.64B	6.58B	6.54B	6.86B
UNITED STATES Growth	-	2.75%	2.79%	5.28%	1.40%	8.39%	24.29%	16.71%	-0.58%	4.89%
Latin America and Caribbean	-	-	-	-	-	-	-	-	368.46M	401.87M
Latin America and Caribbean Growth	-	-	-	-	-	-	-	-	-	9.07%
CANADA	263.91M	267.22M	269.6M	291.69M	294.04M	301.73M	386.78M	389.12M	374.66M	355.8M
CANADA Growth	-	1.25%	0.89%	8.19%	0.81%	2.61%	28.19%	0.60%	-3.72%	-5.03%
Latin America And The Caribbean	-	-	-	-	-	217.94M	256.48M	306.33M	-	-
Latin America And The Caribbean Growth	-	-	-	-	-	-	17.69%	19.43%	-	-
Latin America and the Caribbean	-	-	-	-	292.12M	-	-	-	-	-
Latin America and the Caribbean Growth	-	-	-	-	-	-	-	-	-	-
MEXICO	138.35M	140.28M	152.67M	128.33M	-	-	-	-	-	-
MEXICO Growth	-	1.39%	8.83%	-15.94%	-	-	-	-	-	-

Frequently Asked Questions

Valuation & Price

Watsco, Inc. (WSO) has a price-to-earnings (P/E) ratio of 28.6x. This suggests investors expect higher future growth.

Growth & Financials

Watsco, Inc. (WSO) reported $7.41B in revenue for fiscal year 2024. This represents a 149% increase from $2.98B in 2011.

Watsco, Inc. (WSO) grew revenue by 4.6% over the past year. Growth has been modest.

Yes, Watsco, Inc. (WSO) is profitable, generating $549.7M in net income for fiscal year 2024 (7.0% net margin).

Dividend & Returns

Yes, Watsco, Inc. (WSO) pays a dividend with a yield of 2.97%. This makes it attractive for income-focused investors.

Watsco, Inc. (WSO) has a return on equity (ROE) of 18.9%. This is reasonable for most industries.

Watsco, Inc. (WSO) generated $517.8M in free cash flow for fiscal year 2024. Positive FCF indicates the company can fund dividends, buybacks, or reinvestment.

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