Is the business good?
How good a business is WSO?
Watsco, Inc. earns 21% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
21%
Return on invested capital · cost of capital 9.0% · 12 points above what the capital costs: growth creates value
- Operating margin
- 9.9%
Operating margin · Industrial Distribution median 8.5% · 12 months to Q1 2026
- Cash conversion
- 1.40×
Cash conversion · 0.87× a year ago · every dollar of reported profit arrived as cash, and more
- Share count, year on year
- +0.29%
Share count, year on year · flat: no meaningful dilution
| Year | Operating margin |
|---|---|
| FY2020 | 7.9% |
| FY2021 | 10% |
| FY2022 | 11% |
| FY2023 | 11% |
| FY2024 | 10% |
| FY2025 | 10.0% |
Details›
- Gross margin12 months to Q1 2026
- 28%
- Operating margin12 months to Q1 2026
- 9.9%
- Net margin12 months to Q1 2026
- 6.9%
- Free cash flow margin
- 9.6%
- Revenue, trailing twelve months
- $7.24B
- Free cash flow, trailing twelve months
- $694M
- Net income, trailing twelve months
- $496M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 21%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion from the cash flow statement.
Industrial Distribution
Ranks #13 of 17 by Smart Score