# Watsco, Inc. (WSO) — Stock CV

Watsco, Inc. is a $11.6B industrial company. Revenue shrank 3.0% over the last year, it keeps 7¢ of every dollar of sales as profit, and it holds more cash than debt. It trades at 24.1× earnings — in the cheapest third of its own history.

> Watsco is the largest HVAC and refrigeration products distributor in North America with approximately 13% market share. The company primarily operates in the United States (90% of revenue) with significant exposure in the Sunbelt states.

## Identity

- **Ticker**: WSO
- **Sector**: Industrials
- **Industry**: Wholesale-Hardware & Plumbing & Heating Equipment & Supplies
- **Headquarters**: COCONUT GROVE, FL
- **Employees**: 7 050
- **Website**: https://www.watsco.com
- **Market cap**: $11.6B
- **Last price**: $280.00
- **Financial profile**: Strong

## Vitals (TTM)

- **Revenue**: $7.28B
- **Net income**: $476M
- **Free cash flow**: $697M
- **Net cash**: $254M
- **P/E**: 24.1
- **Revenue growth (YoY)**: -3.0%

## Skills (profile scores, 0–100)

| Pillar | Score |
|---|---|
| Valuation | 77 |
| Growth | 32 |
| Profitability | 65 |
| Health | 100 |
| Quality | 90 |
| Moat | 68 |

## Qualifications (beginner checklist) — 9 of 11 passed

- [ ] Revenue growing — -3.0% YoY
- [x] Profitable — $476M TTM
- [ ] Profit growing — -8.0% YoY
- [x] Generates cash — $697M TTM
- [x] Debt under control — more cash than debt
- [x] Established company — $11.6B market cap
- [x] Not printing shares — +5.5% shares over ~5y
- [x] Proven track record — 10/10 profitable years
- [x] Financially stable — Altman Z 6.1 — safe
- [x] Pays a dividend — yield 4.35%
- [x] Valuation not extreme — P/E 24.1

## Experience (career milestones)

- **FY2022** — Best year on record: $601M net income
- **2022** — Revenues reach US$6 billion 2022: The company's revenues reach US$7 billion and the company was named to the Fortune…
- **FY2017** — Became debt-free: cash now exceeds total debt
- **FY2016** — Profitable every year on record: 10 consecutive profitable years in our data
- **FY2016** — Revenue already above $1B: $4.22B in first reported year
- **FY2016** — Positive free cash flow every year since: 10-year streak
- **1947** — 1947: The company, Wagner Tool & Supply Corp., is founded in New York 1956: Watsco, Inc

## Strengths

- Net cash position after subtracting debt from cash
- Could repay net debt from ~0.1 years of free cash flow
- Interest covered 141.3× by operating earnings
- High returns on invested capital (ROIC 19.7%)
- Altman Z-Score 6.13 — low bankruptcy-risk zone

## Watch-outs

- Revenue shrinking 3.0% year over year

## Track record

| Year | Revenue | Net income | Free cash flow |
|---|---|---|---|
| FY2021 | $6.28B | $419M | $324M |
| FY2022 | $7.27B | $601M | $536M |
| FY2023 | $7.28B | $536M | $526M |
| FY2024 | $7.62B | $536M | $743M |
| FY2025 | $7.24B | $497M | $535M |

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Source: https://stockcv.com/WSO — derived from company filings; may be delayed or incomplete. Information, not investment advice.