Capital International Inc. CA Acquires New Shares in Watsco, Inc. $WSO

Key Points

• Capital International Inc. CA opened a new position in Watsco with 18,280 shares (~$7.39M) in Q3, while Capital International Investors boosted its stake 741.4% to 2,285,895 shares (~$924.19M); institutional holders now own 89.71% of the company.
• Watsco missed the latest quarterly estimates, reporting EPS of $1.68 versus $1.94 expected and revenue of $1.58B versus $1.62B, with revenue down 9.9% year-over-year.
• The company pays a $3.00 quarterly dividend ($12.00 annualized) for a ~3.2% yield but has a high payout ratio of ~99.1%, and analysts have an average rating of Hold with an average target price of $409.

Capital International Inc. CA acquired a new position in shares of Watsco, Inc. (NYSE:WSO - Free Report) during the third quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The fund acquired 18,280 shares of the construction company's stock, valued at approximately $7,391,000.

A number of other institutional investors and hedge funds have also bought and sold shares of the company. Capital International Investors raised its position in Watsco by 741.4% in the third quarter. Capital International Investors now owns 2,285,895 shares of the construction company's stock valued at $924,187,000 after purchasing an additional 2,014,233 shares during the last quarter. Capital Group Private Client Services Inc. bought a new stake in shares of Watsco during the third quarter worth about $463,000. Russell Investments Group Ltd. grew its holdings in shares of Watsco by 12.3% during the third quarter. Russell Investments Group Ltd. now owns 45,140 shares of the construction company's stock worth $18,250,000 after purchasing an additional 4,942 shares during the last quarter. Orion Porfolio Solutions LLC increased its stake in shares of Watsco by 10.5% in the third quarter. Orion Porfolio Solutions LLC now owns 7,848 shares of the construction company's stock valued at $3,173,000 after buying an additional 744 shares during the period. Finally, Level Four Advisory Services LLC increased its stake in shares of Watsco by 3.2% in the third quarter. Level Four Advisory Services LLC now owns 5,456 shares of the construction company's stock valued at $2,206,000 after buying an additional 171 shares during the period. Institutional investors and hedge funds own 89.71% of the company's stock.

Analysts Set New Price Targets

Several equities research analysts recently commented on the stock. KeyCorp reiterated a "sector weight" rating on shares of Watsco in a research report on Friday, December 12th. JPMorgan Chase & Co. upped their price target on shares of Watsco from $370.00 to $400.00 and gave the company a "neutral" rating in a research report on Thursday, February 19th. UBS Group began coverage on shares of Watsco in a research note on Monday, January 5th. They set a "neutral" rating and a $370.00 price target for the company. Mizuho set a $425.00 price target on shares of Watsco in a report on Wednesday, February 18th. Finally, Wolfe Research set a $349.00 price objective on shares of Watsco in a research note on Tuesday, December 9th. One analyst has rated the stock with a Buy rating and eight have given a Hold rating to the company's stock. According to MarketBeat.com, the stock currently has an average rating of "Hold" and an average target price of $409.00.

Watsco Trading Down 3.7%

WSO stock opened at $379.47 on Wednesday. The firm has a market cap of $15.39 billion, a PE ratio of 31.33 and a beta of 1.03. The stock has a 50-day moving average price of $392.02 and a 200-day moving average price of $377.04. Watsco, Inc. has a 1-year low of $323.05 and a 1-year high of $521.70.

Watsco (NYSE:WSO - Get Free Report) last announced its earnings results on Tuesday, February 17th. The construction company reported $1.68 EPS for the quarter, missing the consensus estimate of $1.94 by ($0.26). Watsco had a net margin of 6.87% and a return on equity of 15.49%. The business had revenue of $1.58 billion for the quarter, compared to the consensus estimate of $1.62 billion. During the same quarter in the previous year, the company earned $2.37 EPS. The firm's revenue for the quarter was down 9.9% on a year-over-year basis. On average, analysts forecast that Watsco, Inc. will post 14.62 earnings per share for the current year.

Watsco Dividend Announcement

The firm also recently declared a quarterly dividend, which was paid on Friday, January 30th. Shareholders of record on Friday, January 16th were issued a dividend of $3.00 per share. This represents a $12.00 dividend on an annualized basis and a dividend yield of 3.2%. The ex-dividend date was Friday, January 16th. Watsco's dividend payout ratio is presently 99.09%.

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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