Advisors Capital Management LLC Invests $8.29 Million in Watsco, Inc. $WSO

Key Points

• Advisors Capital Management bought 19,883 Watsco shares worth approximately $8.29 million in the second quarter. Institutional investors collectively own 89.71% of the company.
• Watsco’s latest quarterly results disappointed, with EPS of $4.00 missing estimates of $4.41 and revenue of $2.10 billion rising just 2.1% year over year. The stock was trading near its 52-week low and below its 50-day and 200-day moving averages.
• Analyst sentiment remains cautious: Watsco has an average “Hold” rating and a $395.50 price target, despite Stephens maintaining an “Overweight” rating. The company declared a $3.30 quarterly dividend, equivalent to a 4.2% annualized yield, although its payout ratio exceeds 100%.

Advisors Capital Management LLC purchased a new position in shares of Watsco, Inc. (NYSE:WSO - Free Report) in the second quarter, according to its most recent filing with the Securities and Exchange Commission. The institutional investor purchased 19,883 shares of the construction company's stock, valued at approximately $8,286,000.

Several other institutional investors and hedge funds have also recently bought and sold shares of the stock. Torren Management LLC purchased a new position in shares of Watsco during the 4th quarter worth approximately $26,000. Bayban acquired a new stake in Watsco in the 4th quarter valued at approximately $29,000. Bamco Inc. NY purchased a new stake in Watsco in the fourth quarter valued at approximately $35,000. Laurel Wealth Advisors LLC purchased a new stake in Watsco in the fourth quarter valued at approximately $37,000. Finally, Quarry LP acquired a new position in Watsco during the fourth quarter worth $37,000. 89.71% of the stock is currently owned by hedge funds and other institutional investors.

Key Watsco News

Here are the key news stories impacting Watsco this week:

• Positive Sentiment: Zacks Research raised its FY2028 EPS forecast to $15.26 from $14.93, suggesting stronger long-term earnings potential. Separately, Stephens reaffirmed an Overweight rating on Watsco. Stephens Reaffirms Overweight Rating for Watsco
• Neutral Sentiment: The analyst revisions were mixed: Zacks increased estimates for Q1 2027 and Q1 2028, but maintained its FY2027 EPS forecast at $13.53 and FY2028 forecast at $15.26. The current full-year consensus remains $12.43 per share.
• Negative Sentiment: Zacks lowered its forecasts for Q3 2026 EPS to $4.21 from $4.29, Q4 2026 to $2.13 from $2.15, FY2026 to $12.21 from $12.56, Q2 2027 to $4.61 from $4.75, Q3 2027 to $4.65 from $4.69, Q4 2027 to $2.33 from $2.34, and FY2027 to $13.53 from $13.70. The broad downward revisions indicate softer near- and medium-term earnings expectations.
• Negative Sentiment: The latest quarterly results showed weakening profitability: EPS declined from $4.52 a year earlier and missed analysts’ estimates, while revenue increased only 2.1% year over year. Watsco is trading below its 50-day and 200-day moving averages and near its 52-week low, which may amplify investor caution.

Wall Street Analyst Weigh In

WSO has been the subject of a number of research reports. Stephens reaffirmed an "overweight" rating and issued a $485.00 price objective on shares of Watsco in a research note on Monday. Morgan Stanley increased their target price on Watsco from $370.00 to $405.00 and gave the stock an "equal weight" rating in a research note on Friday, July 10th. Wall Street Zen upgraded Watsco from a "sell" rating to a "hold" rating in a report on Saturday, May 2nd. Weiss Ratings reaffirmed a "hold (c)" rating on shares of Watsco in a research report on Friday, June 26th. Finally, Robert W. Baird set a $400.00 price target on shares of Watsco in a research note on Thursday, July 30th. Two analysts have rated the stock with a Buy rating and nine have assigned a Hold rating to the stock. According to MarketBeat.com, the stock currently has an average rating of "Hold" and an average price target of $395.50.

Watsco Trading Down 1.6%

Watsco stock opened at $314.48 on Friday. The firm has a market capitalization of $12.97 billion, a P/E ratio of 27.27 and a beta of 1.05. Watsco, Inc. has a twelve month low of $300.66 and a twelve month high of $459.00. The stock's fifty day simple moving average is $364.54 and its 200-day simple moving average is $386.25.

Watsco (NYSE:WSO - Get Free Report) last released its earnings results on Wednesday, July 29th. The construction company reported $4.00 EPS for the quarter, missing the consensus estimate of $4.41 by ($0.41). Watsco had a return on equity of 14.40% and a net margin of 6.53%.The company had revenue of $2.10 billion for the quarter, compared to analyst estimates of $2.14 billion. During the same period in the previous year, the firm earned $4.52 earnings per share. The company's revenue for the quarter was up 2.1% compared to the same quarter last year. Sell-side analysts predict that Watsco, Inc. will post 12.38 earnings per share for the current year.

Watsco Dividend Announcement

The company also recently declared a quarterly dividend, which was paid on Friday, July 31st. Investors of record on Thursday, July 16th were paid a $3.30 dividend. The ex-dividend date was Thursday, July 16th. This represents a $13.20 dividend on an annualized basis and a yield of 4.2%. Watsco's payout ratio is currently 114.48%.

Watsco Profile

Watsco, Inc is the largest distributor of heating, ventilation, air conditioning and refrigeration (HVAC/R) equipment, parts and supplies in the United States. Headquartered in Miami, Florida, the company operates a network of more than 600 branches across the continental U.S., Canada and Puerto Rico. Watsco serves residential and commercial contractors by providing essential components for climate control systems, including air conditioners, furnaces, heat pumps, coils, refrigerants, controls and electrical and piping supplies.

Founded in 1947, Watsco has grown from a single regional distributor into an industry leader through a combination of organic expansion, acquisitions and strategic partnerships with original equipment manufacturers such as Carrier, Trane, Goodman and Lennox.

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