Watsco, Inc. $WSO is Dudley & Shanley Inc.'s 5th Largest Position

Key Points

• Dudley & Shanley increased its Watsco stake by 40.1% in the second quarter, making the HVAC distributor 4.9% of its portfolio and its fifth-largest holding. Institutional investors collectively own 89.71% of Watsco.
• Analysts maintain a generally cautious view, with two Buy ratings and nine Hold ratings. Watsco has a consensus rating of Hold and an average price target of $395.50, while recent targets ranged from $330 to $485.
• Watsco’s latest quarterly results fell short of expectations, reporting $4.00 in EPS versus the $4.41 consensus and revenue of $2.10 billion versus $2.14 billion expected. The company paid a quarterly dividend of $3.30, equivalent to a 4.0% annualized yield, though its payout ratio was 114.48%.

Dudley & Shanley Inc. increased its holdings in shares of Watsco, Inc. (NYSE:WSO - Free Report) by 40.1% during the second quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission (SEC). The institutional investor owned 78,012 shares of the construction company's stock after purchasing an additional 22,320 shares during the quarter. Watsco accounts for 4.9% of Dudley & Shanley Inc.'s portfolio, making the stock its 5th biggest holding. Dudley & Shanley Inc. owned about 0.19% of Watsco worth $32,510,000 as of its most recent SEC filing.

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

Analysts Set New Price Targets

A number of research firms have commented on WSO. Robert W. Baird set a $400.00 target price on shares of Watsco in a research report on Thursday, July 30th. DA Davidson dropped their price target on Watsco from $385.00 to $330.00 and set a "neutral" rating on the stock in a research note on Thursday, July 30th. Stephens lifted their price objective on Watsco from $475.00 to $485.00 and gave the stock an "overweight" rating in a report on Wednesday, April 29th. Wall Street Zen raised Watsco from a "sell" rating to a "hold" rating in a report on Saturday, May 2nd. Finally, Weiss Ratings reissued a "hold (c)" rating on shares of Watsco in a research report on Friday, June 26th. Two research analysts have rated the stock with a Buy rating and nine have given a Hold rating to the company. According to MarketBeat, the stock has an average rating of "Hold" and a consensus price target of $395.50.

Watsco Price Performance

Shares of Watsco stock opened at $330.14 on Monday. Watsco, Inc. has a 1-year low of $300.66 and a 1-year high of $459.00. The company's fifty day simple moving average is $374.83 and its 200-day simple moving average is $390.68. The stock has a market capitalization of $13.42 billion, a PE ratio of 28.63 and a beta of 1.05.

Watsco (NYSE:WSO - Get Free Report) last posted its quarterly earnings data on Wednesday, July 29th. The construction company reported $4.00 EPS for the quarter, missing the consensus estimate of $4.41 by ($0.41). The company had revenue of $2.10 billion during the quarter, compared to analysts' expectations of $2.14 billion. Watsco had a return on equity of 14.40% and a net margin of 6.53%.The company's revenue for the quarter was up 2.1% on a year-over-year basis. During the same quarter last year, the company earned $4.52 earnings per share. As a group, research analysts anticipate that Watsco, Inc. will post 12.43 EPS for the current year.

Watsco Dividend Announcement

The business also recently disclosed a quarterly dividend, which was paid on Friday, July 31st. Stockholders of record on Thursday, July 16th were paid a $3.30 dividend. The ex-dividend date of this dividend was Thursday, July 16th. This represents a $13.20 annualized dividend and a dividend yield of 4.0%. Watsco's dividend payout ratio (DPR) is 114.48%.

Watsco Company 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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