Wilkinson Global Asset Management LLC Makes New Investment in Watsco, Inc. $WSO

Key Points

• Wilkinson Global Asset Management bought 75,839 Watsco shares worth approximately $31.6 million, making the stock 2.5% of its portfolio; institutional investors collectively own 89.71% of Watsco.
• Watsco’s latest quarterly results fell short of expectations, with earnings of $4.00 per share versus the $4.41 consensus and revenue of $2.10 billion versus $2.14 billion expected. Revenue still increased 2.1% year over year.
• The company paid a quarterly dividend of $3.30 per share, equivalent to a $13.20 annualized payout and a 4.2% yield. Analysts maintain a consensus “Hold” rating with an average price target of $395.50.

Wilkinson Global Asset Management LLC bought a new position in shares of Watsco, Inc. (NYSE:WSO - Free Report) during the 2nd quarter, according to the company in its most recent 13F filing with the Securities & Exchange Commission. The institutional investor bought 75,839 shares of the construction company's stock, valued at approximately $31,604,000. Watsco comprises 2.5% of Wilkinson Global Asset Management LLC's investment portfolio, making the stock its 17th largest position. Wilkinson Global Asset Management LLC owned 0.19% of Watsco at the end of the most recent reporting period.

A number of other hedge funds and other institutional investors also recently made changes to their positions in the business. Empowered Funds LLC grew its holdings in Watsco by 4.1% during the 1st quarter. Empowered Funds LLC now owns 5,927 shares of the construction company's stock worth $3,013,000 after acquiring an additional 232 shares during the last quarter. Bank of Nova Scotia raised its stake in shares of Watsco by 95.0% in the second quarter. Bank of Nova Scotia now owns 1,297 shares of the construction company's stock worth $573,000 after acquiring an additional 632 shares during the last quarter. Sei Investments Co. lifted its position in shares of Watsco by 7.6% during the second quarter. Sei Investments Co. now owns 50,442 shares of the construction company's stock worth $22,275,000 after purchasing an additional 3,570 shares in the last quarter. Treasurer of the State of North Carolina lifted its position in shares of Watsco by 2.8% during the second quarter. Treasurer of the State of North Carolina now owns 16,258 shares of the construction company's stock worth $7,180,000 after purchasing an additional 437 shares in the last quarter. Finally, Diversify Advisory Services LLC grew its stake in shares of Watsco by 12.0% during the second quarter. Diversify Advisory Services LLC now owns 523 shares of the construction company's stock valued at $221,000 after purchasing an additional 56 shares during the last quarter. 89.71% of the stock is currently owned by institutional investors and hedge funds.

Watsco Stock Performance

Shares of NYSE:WSO opened at $312.65 on Monday. Watsco, Inc. has a 52 week low of $300.66 and a 52 week high of $459.00. The company has a market capitalization of $12.90 billion, a PE ratio of 27.12 and a beta of 1.05. The company has a 50 day moving average price of $369.74 and a two-hundred day moving average price of $388.24.

Watsco (NYSE:WSO - Get Free Report) last announced its quarterly earnings results on Wednesday, July 29th. The construction company reported $4.00 earnings per share for the quarter, missing analysts' consensus estimates of $4.41 by ($0.41). Watsco had a return on equity of 14.40% and a net margin of 6.53%.The firm had revenue of $2.10 billion for the quarter, compared to the consensus estimate of $2.14 billion. During the same period in the prior year, the business earned $4.52 earnings per share. The company's revenue for the quarter was up 2.1% compared to the same quarter last year. On average, sell-side analysts forecast that Watsco, Inc. will post 12.43 earnings per share for the current year.

Watsco Announces Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Friday, July 31st. Investors of record on Thursday, July 16th were paid a dividend of $3.30 per share. This represents a $13.20 annualized dividend and a yield of 4.2%. The ex-dividend date of this dividend was Thursday, July 16th. Watsco's dividend payout ratio (DPR) is presently 114.48%.

Wall Street Analyst Weigh In

A number of analysts recently weighed in on WSO shares. Wall Street Zen raised shares of Watsco from a "sell" rating to a "hold" rating in a report on Saturday, May 2nd. Morgan Stanley upped their price objective on Watsco from $370.00 to $405.00 and gave the stock an "equal weight" rating in a report on Friday, July 10th. Stephens increased their price objective on Watsco from $475.00 to $485.00 and gave the company an "overweight" rating in a research report on Wednesday, April 29th. Robert W. Baird set a $400.00 target price on Watsco in a research note on Thursday, July 30th. Finally, Weiss Ratings restated a "hold (c)" rating on shares of Watsco in a research report on Friday, June 26th. Two equities research analysts have rated the stock with a Buy rating and nine have issued a Hold rating to the company. According to MarketBeat.com, the company presently has a consensus rating of "Hold" and an average price target of $395.50.

About Watsco

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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