* Note: Prices are in Million (M) USD.
Description:
Watsco, Inc. distributes air conditioning, heating and refrigeration equipment; and related parts and supplies in the United States, Canada, Mexico and Puerto Rico. The company is headquartered in Miami, Florida.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $293 M
Debt : $454 M
EBITDA : $782 M
Net Debt (Debt - Cash): $161 M
Since Net Debt is covered by EBITDA within 1 year, 3 points assigned.
This criteria used industry in which company operates:
Sector: Technology
Industry: Electronics distribution
Based on sector, 5 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 29.38
Since Forward PE Ratio is between 25 - 35, 1 point assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 20 overlapping fiscal years (max 20).Average Free Cash Flow: $242 M
Average Revenue: $4,069 M
Revenue Converted To Free Cash Flow (%): 5.9%
Since Free Cash Flow (FCF) to Revenue percentage is less than 15, 1 point assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-12-31): $7,618 M
Revenue 4 Years Ago (2020-12-31): $5,055 M
Last 5 Years Average Revenue Growth: 10%
Since Revenue Growth is between 10 - 15, 3 points assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-12-31): $38 M
Share Count 5 Years Ago (2020-12-31): $35 M
Company is not buying back its own shares, 0 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $13.86
Trailing 12-Month Earnings Per Share (EPS): $12.70
Average Earnings Per Share (EPS): $13.28
Dividend Per Share (DPS): $11
Payout Ratio: 84%
Dividend Yield: 3%
Since company Payout Ratio is greater than 50, 1 point assigned.
Since Dividend Yield is greater than 2, 2 points assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 20 valid ROE years (max 20).Average ROE: 16.7%
Since Average ROE is between 10 - 20, 3 points assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $390
52-Week Low: $403
Threshold Price (15% Above 52-Week Low): $463
Since Current price is within 15% threshold, 5 points assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $16,943 M
Since Market Cap is between 10B - 100B, 2 points assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 3% exposure of Total Portfolio.
Value-Trade has assigned 26 points to above Watsco Inc (WSO) stock.
Last 20 Years Avg PE
25.37, Fair Value PE
25, Industry Based PE
15, Growth Based PE
10.14, RCFC Based PE
5.94, ROE Based PE
16.74, Risk-Free Anchored PE (25% MoS)
17.61. Based on these 7 values, average assigned is
16.54. Value-Trades has assined P/E value
16.54. An average (Current Year EPS + Next Year EPS) earning per share is
$13.28.
Fair value using multiple P/Es (blended): $219.68 (PE 16.54 × EPS $13.28)
So the Final Fair Value is: $219.68
