ScoreWhy is Watsco, Inc. ?
1
High Management Efficiency with a high ROCE of 33.49%
2
Company has a low Debt to Equity ratio (avg) at times
3
Healthy long term growth as Net Sales has grown by an annual rate of 9.22% and Operating profit at 16.80%
4
Flat results in Jun 25
- ROCE(HY) Lowest at 18.38%
- INVENTORY TURNOVER RATIO(HY) Lowest at 3.11 times
5
With ROCE of 31.28%, it has a very expensive valuation with a 8.38 Enterprise value to Capital Employed
- The stock is trading at a discount compared to its peers' average historical valuations
- Over the past year, while the stock has generated a return of -30.18%, its profits have risen by 2%
6
Below par performance in long term as well as near term
- Along with generating -30.18% returns in the last 1 year, the stock has also underperformed S&P 500 in the last 3 years, 1 year and 3 months
Real-Time Research ReportHow much should you hold?
- Overall Portfolio exposure to Watsco, Inc. should be less than 10%
- Overall Portfolio exposure to Building Products should be less than 30%
(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Building Products)
When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock
Is Watsco, Inc. for you?
Medium Risk, Low Return
Absolute
Risk Adjusted
Volatility
Watsco, Inc.
-24.79%
-0.68
33.31%
S&P 500
16.41%
0.70
20.15%
Quality
Management Risk
Growth
Capital StructureQuality key factors
Factor
Value
Sales Growth (5y)
7.45%
EBIT Growth (5y)
12.23%
EBIT to Interest (avg)
100.00
Debt to EBITDA (avg)
0.11
Net Debt to Equity (avg)
-0.12
Sales to Capital Employed (avg)
2.74
Tax Ratio
20.88%
Dividend Payout Ratio
97.98%
Pledged Shares
0
Institutional Holding
100.00%
ROCE (avg)
33.49%
ROE (avg)
26.16%
ValuationValuation Key Factors 
Factor
Value
P/E Ratio
30
Industry P/E
Price to Book Value
6.01
EV to EBIT
23.20
EV to EBITDA
22.15
EV to Capital Employed
7.43
EV to Sales
2.22
PEG Ratio
NA
Dividend Yield
2.73%
ROCE (Latest)
32.04%
ROE (Latest)
19.79%
TechnicalsTechnical key factors
Indicator
Weekly
Monthly
MACD
Mildly Bullish
Bearish
RSI
No Signal
No Signal
Bollinger Bands
Bullish
Bearish
Moving Averages
Bearish (Daily)
KST
Bullish
Bearish
Dow Theory
No Trend
Mildly Bullish
OBV
No Trend
No Trend
Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned 
Financial Trend3What is working for the Company
DIVIDEND PAYOUT RATIO(Y)
Highest at 178.49%
RAW MATERIAL COST(Y)
Fallen by -4.18% (YoY
DIVIDEND PER SHARE(HY)
Highest at USD 8.65
-15What is not working for the Company
ROCE(HY)
Lowest at 16.88%
NET SALES(Q)
At USD 1,578.76 MM has Fallen at -14.83%
OPERATING PROFIT(Q)
Lowest at USD 95.79 MM
OPERATING PROFIT MARGIN(Q)
Lowest at 6.07 %
PRE-TAX PROFIT(Q)
Lowest at USD 107.38 MM
NET PROFIT(Q)
Lowest at USD 63.75 MM
EPS(Q)
Lowest at USD 1.68
Here's what is working for Watsco, Inc.
Dividend per share
Highest at USD 8.65
in the last five yearsMOJO Watch
Company is distributing higher dividend from profits generated
DPS (USD)
Dividend Payout Ratio
Highest at 178.49%
in the last five yearsMOJO Watch
Company is distributing higher proportion of profits generated as dividend
DPR (%)
Raw Material Cost
Fallen by -4.18% (YoY)
MOJO Watch
The company's ability to pass on the cost of raw materials to customers has improved; this may lead to a rise in profit margin
Raw Material Cost as a percentage of Sales
Here's what is not working for Watsco, Inc.
Pre-Tax Profit
At USD 107.38 MM has Fallen at -44.52%
over average net sales of the previous four periods of USD 193.53 MMMOJO Watch
Near term Pre-Tax Profit trend is very negative
Pre-Tax Profit (USD MM)
Net Profit
At USD 63.75 MM has Fallen at -47.54%
over average net sales of the previous four periods of USD 121.52 MMMOJO Watch
Near term Net Profit trend is very negative
Net Profit (USD MM)
Net Sales
At USD 1,578.76 MM has Fallen at -14.83%
over average net sales of the previous four periods of USD 1,853.62 MMMOJO Watch
Near term sales trend is very negative
Net Sales (USD MM)
Operating Profit
Lowest at USD 95.79 MM
in the last five periodsMOJO Watch
Near term Operating Profit trend is negative
Operating Profit (USD MM)
Operating Profit Margin
Lowest at 6.07 %
in the last five periodsMOJO Watch
Company's profit margin has deteriorated
Operating Profit to Sales
Pre-Tax Profit
Lowest at USD 107.38 MM
in the last five periodsMOJO Watch
Near term Pre-Tax Profit trend is negative
Pre-Tax Profit (USD MM)
Net Profit
Lowest at USD 63.75 MM
in the last five periodsMOJO Watch
Near term Net Profit trend is negative
Net Profit (USD MM)
EPS
Lowest at USD 1.68
in the last five periodsMOJO Watch
Declining profitability; company has created lower earnings for shareholders
EPS (USD)
Non Operating Income
Highest at USD 0.11 MM
in the last five periodsMOJO Watch
Increased income from non business activities may not be sustainable
Non Operating income
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