Watsco WSO
Watsco is the largest distributor of HVAC equipment in the United States, acting as an intermediary between manufacturers and installing contractors. Watsco has excellent financial health (ND/EBITDA of 0.10, liquidity of 3.20) and notable moat quality (ROIC of 21.33%), but its growth is weak (revenue +2.10%, earnings -11.70%) and valuation is not cheap (P/E 27.59), which limits its appeal.
Detailed metrics
Market and fundamental data as of the analysis date.
Full AI report
Generated automatically from the metrics, the macro context and the company's news.
Watsco is the largest distributor of HVAC equipment in the United States, acting as an intermediary between manufacturers and installing contractors. Watsco has excellent financial health (ND/EBITDA of 0.10, liquidity of 3.20) and notable moat quality (ROIC of 21.33%), but its growth is weak (revenue +2.10%, earnings -11.70%) and valuation is not cheap (P/E 27.59), which limits its appeal.
Score by category
| Category | Score |
|---|---|
| Financial health | 7.9 |
| Quality / Moat | 6.7 |
| Valuation | 4.7 |
| Growth | 3.7 |
| Dividend | 4.8 |
| Momentum | 1.8 |
| Risk & Context | 6.2 |
OVERALL SCORE: 5.5/10
Context and risks
No material exposure to relevant macro factors (oil, rates, geopolitics). The HVAC distribution business in the US is not directly affected by the oil price surge or Middle East tensions.
News considered in the analysis
- These 3 Boring Stocks Have One Thing in Common: Demand That Cannot Wait — Listículo genérico sin información específica nueva sobre Watsco.
- 3 Cash-Producing Stocks We Keep Off Our Radar — Artículo de opinión sin datos concretos que afecten a la valoración.
- 5 Industrial Distributors With a Competitive Advantage Hiding in Plain Sight — Comparativa sectorial genérica, sin información nueva sobre Watsco.
- 1 Profitable Stock to Target This Week and 2 We Question — Selección de acciones sin catalizadores específicos identificables.
- Watsco (WSO) Stock Appears Undervalued Based On Future Cash Flow — Análisis de valoración basado en DCF, sin información nueva que no esté ya en el precio.
Verdict: Hold. The strong balance sheet and dividend (net yield 4.16%) provide support, but the lack of growth and demanding multiple limit upside potential.
Main risk: Stagnant earnings growth (-11.70%) in a potentially cyclical HVAC demand environment, which may not justify the current multiple of 27.59 times earnings.
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