Vanguard Group Inc. Sells 27,546 Shares of Watsco, Inc. $WSO

Key Points

• Vanguard Group trimmed its Watsco stake by 0.8%, selling 27,546 shares in Q4 but still holds 3,523,522 shares—about 8.69% of the company valued at roughly $1.19 billion, and institutional investors own 89.71% of WSO.
• Analysts' consensus is a Hold with an average price target of $399.83 (recent targets range from $370 to $485), while Watsco traded around $429.56, above the average target.
• Watsco beat quarterly EPS ($1.87 vs. $1.73) and raised its quarterly dividend to $3.30 (annualized $13.20, yield 3.1%), but the dividend carries a high 109.54% payout ratio, which may raise sustainability questions.

Vanguard Group Inc. trimmed its holdings in shares of Watsco, Inc. (NYSE:WSO - Free Report) by 0.8% in the fourth quarter, according to the company in its most recent filing with the Securities and Exchange Commission (SEC). The fund owned 3,523,522 shares of the construction company's stock after selling 27,546 shares during the period. Vanguard Group Inc. owned about 8.69% of Watsco worth $1,187,251,000 at the end of the most recent quarter.

Several other hedge funds also recently modified their holdings of WSO. Truist Financial Corp grew its stake in Watsco by 89.2% during the third quarter. Truist Financial Corp now owns 37,808 shares of the construction company's stock worth $15,286,000 after buying an additional 17,820 shares in the last quarter. Donaldson Capital Management LLC raised its position in shares of Watsco by 47.7% in the 3rd quarter. Donaldson Capital Management LLC now owns 124,789 shares of the construction company's stock valued at $50,452,000 after buying an additional 40,326 shares in the last quarter. Federated Hermes Inc. lifted its holdings in shares of Watsco by 577.9% during the 3rd quarter. Federated Hermes Inc. now owns 19,957 shares of the construction company's stock worth $8,069,000 after acquiring an additional 17,013 shares during the period. Allianz Asset Management GmbH lifted its holdings in shares of Watsco by 237.5% during the 3rd quarter. Allianz Asset Management GmbH now owns 5,629 shares of the construction company's stock worth $2,276,000 after acquiring an additional 3,961 shares during the period. Finally, Atlantic Union Bankshares Corp acquired a new stake in shares of Watsco during the 3rd quarter worth approximately $1,392,000. Institutional investors own 89.71% of the company's stock.

Analysts Set New Price Targets

A number of research analysts recently issued reports on the stock. UBS Group began coverage on shares of Watsco in a research note on Monday, January 5th. They issued a "neutral" rating and a $370.00 price objective on the stock. Stephens raised their target price on Watsco from $475.00 to $485.00 and gave the company an "overweight" rating in a report on Wednesday. Zacks Research upgraded Watsco from a "strong sell" rating to a "hold" rating in a research note on Wednesday, February 25th. JPMorgan Chase & Co. boosted their price target on Watsco from $370.00 to $400.00 and gave the stock a "neutral" rating in a report on Thursday, February 19th. Finally, Mizuho set a $425.00 price objective on Watsco in a research report on Wednesday, February 18th. One equities research analyst has rated the stock with a Buy rating and eight have given a Hold rating to the company. Based on data from MarketBeat, the stock has an average rating of "Hold" and an average price target of $399.83.

Watsco Trading Down 1.9%

NYSE:WSO opened at $429.56 on Friday. The stock's 50-day moving average is $398.25 and its 200-day moving average is $376.93. The stock has a market cap of $17.44 billion, a P/E ratio of 35.65 and a beta of 1.06. Watsco, Inc. has a 1-year low of $323.05 and a 1-year high of $496.25.

Watsco (NYSE:WSO - Get Free Report) last posted its earnings results on Tuesday, April 28th. The construction company reported $1.87 EPS for the quarter, topping the consensus estimate of $1.73 by $0.14. Watsco had a net margin of 6.85% and a return on equity of 15.31%. The business had revenue of $1.53 billion for the quarter, compared to the consensus estimate of $1.49 billion. During the same period last year, the company earned $1.93 EPS. The firm's revenue was up .1% compared to the same quarter last year. As a group, equities analysts forecast that Watsco, Inc. will post 12.62 EPS for the current year.

Watsco Increases Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Thursday, April 30th. Investors of record on Thursday, April 16th were paid a $3.30 dividend. This is a positive change from Watsco's previous quarterly dividend of $3.00. This represents a $13.20 annualized dividend and a dividend yield of 3.1%. The ex-dividend date of this dividend was Thursday, April 16th. Watsco's payout ratio is presently 109.54%.

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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