Watsco Inc. Common Stock (WSO)

FairStock Score: 47/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for businesses that earn high returns on capital, convert profits to cash, and sell at a sensible price. Watsco is a distributor of HVAC and refrigeration equipment and parts, a business with recurring replacement demand and a distribution network that can create modest scale advantages. The financial foundation is solid: as of the 2026-10-13 close, FairStock calculates a P/E of 25.00 and P/B of 3.76, with debt/equity of only 0.15 and an Altman Z-Score of 5.63. FairStock calculates return on equity of 16.74%, though ROCE of 8.37% is not exceptional. Cash generation is the brightest spot: FairStock calculates trailing free cash flow of $697.1M, a 6.3% FCF yield, and the 4.23% dividend yield is meaningful.

In plain English: Watsco sells air conditioning, heating, and refrigeration equipment and parts. The business generates steady cash and carries little debt, but sales have been flat and profits have slipped recently. At $291.50 on 2026-10-13, the stock looks expensive compared with its current earnings and accounting value, even though it pays a solid dividend.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer