Watsco, Inc. (NYSE:WSO) Given Consensus Recommendation of "Hold" by Brokerages

Key Points

• Wall Street sentiment is cautious on Watsco, with 10 analysts averaging a “Hold” rating; nine rate it Hold and one rates it Buy. The consensus 12-month price target is about $402.71.
• Watsco’s latest quarterly results beat expectations, posting EPS of $1.87 versus the $1.73 estimate and revenue of $1.53 billion versus $1.49 billion expected. Analysts are forecasting full-year EPS of 12.66.
• The company announced a quarterly dividend of $3.30 per share, payable July 31, implying an annualized dividend of $13.20 and a yield of 3.4%. The payout ratio is high at 109.54%.

Shares of Watsco, Inc. (NYSE:WSO - Get Free Report) have received an average rating of "Hold" from the ten analysts that are presently covering the stock, Marketbeat Ratings reports. Nine equities research analysts have rated the stock with a hold rating and one has issued a buy rating on the company. The average 12-month target price among brokerages that have issued a report on the stock in the last year is $402.7143.

A number of analysts have issued reports on the company. Weiss Ratings reaffirmed a "hold (c)" rating on shares of Watsco in a research note on Friday, June 26th. Morgan Stanley increased their target price on Watsco from $370.00 to $405.00 and gave the company an "equal weight" rating in a research report on Friday. Stephens raised their target price on shares of Watsco from $475.00 to $485.00 and gave the company an "overweight" rating in a report on Wednesday, April 29th. Wall Street Zen upgraded shares of Watsco from a "sell" rating to a "hold" rating in a research report on Saturday, May 2nd. Finally, DA Davidson initiated coverage on shares of Watsco in a research note on Tuesday, June 16th. They set a "neutral" rating and a $385.00 price target on the stock.

Institutional Trading of Watsco

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

Watsco Stock Up 1.7%

WSO stock traded up $6.53 during mid-day trading on Friday, hitting $384.26. The company had a trading volume of 268,315 shares, compared to its average volume of 317,500. The company has a 50-day moving average price of $393.55 and a 200 day moving average price of $391.03. Watsco has a 12-month low of $323.05 and a 12-month high of $494.94. The company has a market capitalization of $15.62 billion, a price-to-earnings ratio of 31.89 and a beta of 1.02.

Watsco (NYSE:WSO - Get Free Report) last issued its earnings results on Tuesday, April 28th. The construction company reported $1.87 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.73 by $0.14. Watsco had a return on equity of 15.31% and a net margin of 6.85%.The firm had revenue of $1.53 billion for the quarter, compared to analysts' expectations of $1.49 billion. During the same period in the previous year, the firm posted $1.93 earnings per share. The business's revenue was up .1% compared to the same quarter last year. As a group, analysts expect that Watsco will post 12.66 EPS for the current year.

Watsco Announces Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Friday, July 31st. Shareholders of record on Thursday, July 16th will be paid a $3.30 dividend. This represents a $13.20 dividend on an annualized basis and a dividend yield of 3.4%. The ex-dividend date of this dividend is Thursday, July 16th. Watsco's dividend payout ratio (DPR) is presently 109.54%.

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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