Watsco (WSO.B) Stock Analysis
This is a peer-relative look at Watsco (WSO.B): its performance, risk, profitability, growth, financial strength, dividend, and valuation are each measured against its Capital Goods peers, so every number reads in context rather than in isolation.
Company Profile
| Profile Item | WSO.B |
|---|---|
| Name | Watsco Inc. Class B Common Stock |
| Country/Region | United States |
| GICS Sector | Industrials |
| GICS Industry Group | Capital Goods |
| GICS Industry | Trading Companies & Distributors |
| GICS Sub-Industry | Trading Companies & Distributors |
| Market Capitalization | 12.92 billion USD |
| Currency | USD |
| Exchange | NYSE |
| Listing Date | March 17, 1980 |
| Security Type | Common Stock |
Price Performance
Cumulative Growth
Trailing Returns
Calendar-Year Returns
Performance Metrics
| Metric | Current stock: WSO.B | Industry group median |
|---|---|---|
| Total Return (1Y) | -11.21% | 6.84% |
| Total Return (3Y, Annualized) | -3.05% | 17.66% |
| Total Return (5Y, Annualized) | 4.30% | 9.09% |
Risk Profile
Drawdown History
Return Distribution
Risk Metrics
| Metric | Current stock: WSO.B | Industry group median |
|---|---|---|
| Volatility (1Y, Annualized) | 40.28% | 44.38% |
| Beta (5Y) | 0.64 | 1.19 |
| Max Drawdown (5Y) | -43.41% | -49.95% |
Risk-Adjusted Performance
Risk-Return Positioning
Risk-Adjusted Metrics
| Metric | Current stock: WSO.B | Industry group median |
|---|---|---|
| Sharpe Ratio (1Y) | -0.38 | 0.06 |
| Sortino Ratio (1Y) | -0.57 | 0.09 |
Profitability
ROE (TTM)
Watsco (WSO.B) posts ROE of 16.21%, roughly around the peer group’s normal range. Shareholders’ equity is producing a return that looks broadly typical for the industry.
WSO.B
Capital Goods industry group
16.21%
Group distribution
- Max
- 40.55%
- Q3
- 19.29%
- WSO.B
- 16.21%
- Median
- 12.12%
- Q1
- 4.08%
- Min
- -17.12%
Largest peers
- GEV
- 93.04%
- CAT
- 56.14%
- GE
- 50.17%
- DE
- 18.24%
- WSO.B
- 16.21%
- RTX
- 12.85%
- BA
- --
Net Margin (TTM)
Watsco (WSO.B) keeps 6.31% of revenue as net profit, roughly in line with the peer group’s normal net margin range. Its full cost stack is taking a typical share of sales for the industry.
WSO.B
Capital Goods industry group
6.31%
Group distribution
- Max
- 27.47%
- Q3
- 12.10%
- WSO.B
- 6.31%
- Median
- 6.30%
- Q1
- 1.40%
- Min
- -12.89%
Largest peers
- GEV
- 23.54%
- GE
- 17.31%
- CAT
- 15.21%
- DE
- 10.17%
- RTX
- 8.75%
- BA
- 8.07%
- WSO.B
- 6.31%
Operating Margin (TTM)
Watsco (WSO.B) turns 10.14% of revenue into operating profit, roughly in line with the peer group’s normal operating margin range. Its core cost structure looks typical for the industry.
WSO.B
Capital Goods industry group
10.14%
Group distribution
- Max
- 36.60%
- Q3
- 18.33%
- Median
- 11.12%
- WSO.B
- 10.14%
- Q1
- 5.14%
- Min
- -12.63%
Largest peers
- CAT
- 20.19%
- GE
- 18.49%
- RTX
- 15.54%
- DE
- 13.37%
- GEV
- 12.77%
- WSO.B
- 10.14%
- BA
- 0.30%
Profitability Metrics
| Metric | Current stock: WSO.B | Industry group median |
|---|---|---|
| ROE (TTM) | 16.21% | 12.12% |
| ROA (TTM) | 8.27% | 5.29% |
| Net Margin (TTM) | 6.31% | 6.30% |
| Operating Margin (TTM) | 10.14% | 11.12% |
| Gross Margin (TTM) | 27.18% | 29.63% |
Growth
Revenue Growth
Watsco (WSO.B) grew revenue -4.98%, in the lower peer quartile. The top line is expanding more slowly than at most peers, which can reflect softer demand, lost share, or weaker pricing.
EPS Growth
Watsco (WSO.B) grew earnings per share -7.47%, roughly around the peer group's normal range. Bottom-line momentum looks broadly typical for the industry.
Growth Metrics
| Metric | Current stock: WSO.B | Industry group median |
|---|---|---|
| Revenue Growth (YoY) | -4.98% | 8.11% |
| Revenue Growth (3Y CAGR) | -0.16% | 6.45% |
| EPS Growth (YoY) | -7.47% | 5.45% |
| EPS Growth (3Y CAGR) | -6.89% | 7.15% |
Financial Strength
Current Ratio (MRQ)
Watsco (WSO.B) has current ratio of 3.15, above the industry’s typical middle range. Liquidity looks ample versus peers, though an unusually high cushion can also mean idle current assets or inefficient working capital.
WSO.B
Capital Goods industry group
3.15
Group distribution
- Max
- 5.22
- WSO.B
- 3.15
- Q3
- 2.95
- Median
- 2.08
- Q1
- 1.43
- Min
- 0.36
Largest peers
- WSO.B
- 3.15
- DE
- 2.13
- CAT
- 1.42
- BA
- 1.13
- RTX
- 1.05
- GE
- 0.98
- GEV
- 0.83
Debt / Equity (MRQ)
Watsco (WSO.B) has debt-to-equity ratio of 0.16, in the lower-leverage quartile for its industry. Borrowing is modest relative to equity compared with most peers, which can leave more flexibility through a cycle.
WSO.B
Capital Goods industry group
0.16
Group distribution
- Max
- 2.33
- Q3
- 1.12
- Median
- 0.60
- Q1
- 0.29
- WSO.B
- 0.16
- Min
- 0.00
Largest peers
- BA
- 7.39
- DE
- 2.30
- CAT
- 2.10
- GE
- 1.16
- RTX
- 0.55
- GEV
- 0.30
- WSO.B
- 0.16
Financial Strength Metrics
| Metric | Current stock: WSO.B | Industry group median |
|---|---|---|
| Current Ratio (MRQ) | 3.15 | 2.08 |
| Debt / Equity (MRQ) | 0.16 | 0.60 |
| Net Debt / EBITDA | -0.14 | 1.78 |
Dividends
Dividend Yield (TTM)
Watsco (WSO.B) has dividend yield of 4.02%, above the entire industry range. That headline income is large, but yields this far above peers often come from a falling share price or an at-risk payout, so dividend safety matters more than the percentage itself.
WSO.B
Capital Goods industry group
4.02%
Group distribution
- WSO.B
- 4.02%
- Max
- 2.66%
- Q3
- 1.14%
- Median
- 0.24%
- Q1
- 0.00%
- Min
- 0.00%
Largest peers
- WSO.B
- 4.02%
- RTX
- 1.47%
- CAT
- 1.13%
- DE
- 0.98%
- GE
- 0.56%
- GEV
- 0.26%
- BA
- 0.00%
Dividend Payout Ratio (TTM)
Watsco (WSO.B) has payout ratio of 109.66%, meaning dividends exceeded current-period earnings. The gap would need to be covered by cash, retained earnings, financing, or other sources, so earnings alone do not support the payout.
WSO.B
Capital Goods industry group
109.66%
Group distribution
- WSO.B
- 109.66%
- Max
- 67.39%
- Q3
- 28.02%
- Median
- 6.86%
- Q1
- 0.00%
- Min
- 0.00%
Largest peers
- WSO.B
- 109.66%
- RTX
- 45.85%
- DE
- 36.02%
- CAT
- 24.18%
- GE
- 20.23%
- GEV
- 4.59%
- BA
- 0.00%
Dividend Metrics
| Metric | Current stock: WSO.B | Industry group median |
|---|---|---|
| Dividend Yield (TTM) | 4.02% | 0.24% |
| Dividend Payout Ratio (TTM) | 109.66% | 6.86% |
Valuation
P/E Ratio (TTM)
Watsco (WSO.B) trades at P/E ratio of 27.26, near the industry’s usual earnings multiple. The stock is not showing a clear peer discount or premium on trailing earnings.
WSO.B
Capital Goods industry group
27.26
Group distribution
- Max
- 59.38
- Q3
- 35.92
- WSO.B
- 27.26
- Median
- 25.41
- Q1
- 19.47
- Min
- 3.03
Largest peers
- DE
- 37.33
- GE
- 36.94
- RTX
- 30.82
- WSO.B
- 27.26
- CAT
- 21.92
- GEV
- 20.32
- BA
- 17.89
P/S Ratio (TTM)
Watsco (WSO.B) trades at 1.74 on P/S ratio, roughly in the peer group’s normal range. The market is not making a strong cheap-or-rich statement about its revenue base.
WSO.B
Capital Goods industry group
1.74
Group distribution
- Max
- 7.54
- Q3
- 3.76
- Median
- 2.15
- WSO.B
- 1.74
- Q1
- 1.03
- Min
- 0.03
Largest peers
- GE
- 6.38
- GEV
- 4.65
- DE
- 3.78
- CAT
- 3.29
- RTX
- 2.66
- WSO.B
- 1.74
- BA
- 1.45
P/B Ratio (MRQ)
Watsco (WSO.B) trades at 3.99 on P/B ratio, roughly in line with the industry’s normal price-to-book range. Its balance sheet is not being priced at a clear discount or premium versus peers.
WSO.B
Capital Goods industry group
3.99
Group distribution
- Max
- 9.66
- Q3
- 5.00
- WSO.B
- 3.99
- Median
- 3.12
- Q1
- 1.81
- Min
- -1.08
Largest peers
- BA
- 20.99
- GE
- 19.06
- GEV
- 18.00
- CAT
- 11.90
- DE
- 6.47
- WSO.B
- 3.99
- RTX
- 3.69
Valuation Metrics
| Metric | Current stock: WSO.B | Industry group median |
|---|---|---|
| P/E Ratio (TTM) | 27.26 | 25.41 |
| P/S Ratio (TTM) | 1.74 | 2.15 |
| P/B Ratio (MRQ) | 3.99 | 3.12 |
| Free Cash Flow Yield (TTM) | 3.50% | 3.03% |