Watsco, Inc. (NYSE:WSO) Plans Dividend Increase - $3.30 Per Share

Key Points

• 10.0% dividend increase: Watsco raised its quarterly dividend to $3.30 (annualized $13.20) — a ~3.2% yield — with an ex‑dividend/record date of April 16 and payment on April 30.
• Dividend sustainability: The company has raised its dividend for 13 consecutive years but carries a high payout ratio of 85.3%; analysts expect about $16.05 EPS next year (implying ~82% payout), so coverage exists but could be pressured if earnings weaken.
• Recent results and valuation: Watsco missed the quarter with EPS $1.68 vs $1.94 expected and revenue down 9.9% YoY; shares trade near $416 with a market cap of $16.9B and a P/E of ~34.4 (52‑week range $323.05–$518.00).

Watsco, Inc. (NYSE:WSO - Get Free Report) declared a quarterly dividend on Wednesday, April 1st. Investors of record on Thursday, April 16th will be given a dividend of 3.30 per share by the construction company on Thursday, April 30th. This represents a c) dividend on an annualized basis and a yield of 3.2%. The ex-dividend date is Thursday, April 16th. This is a 10.0% increase from Watsco's previous quarterly dividend of $3.00.

Watsco has raised its dividend payment by an average of 0.1%annually over the last three years and has increased its dividend every year for the last 13 years. Watsco has a dividend payout ratio of 85.3% meaning its dividend is currently covered by earnings, but may not be in the future if the company's earnings tumble. Research analysts expect Watsco to earn $16.05 per share next year, which means the company should continue to be able to cover its $13.20 annual dividend with an expected future payout ratio of 82.2%.

Watsco Price Performance

WSO stock opened at $416.10 on Tuesday. Watsco has a 1 year low of $323.05 and a 1 year high of $518.00. The company has a market cap of $16.89 billion, a P/E ratio of 34.36 and a beta of 1.06. The firm has a 50-day moving average of $393.71 and a 200 day moving average of $373.48.

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

Institutional Investors Weigh In On Watsco

Hedge funds and other institutional investors have recently bought and sold shares of the business. Capital International Investors grew its holdings in shares of Watsco by 103.1% during the fourth quarter. Capital International Investors now owns 4,642,893 shares of the construction company's stock valued at $1,564,423,000 after buying an additional 2,356,998 shares during the last quarter. Charles Schwab Investment Management Inc. grew its holdings in shares of Watsco by 3.1% during the fourth quarter. Charles Schwab Investment Management Inc. now owns 1,559,965 shares of the construction company's stock valued at $525,634,000 after buying an additional 46,799 shares during the last quarter. State Street Corp grew its holdings in shares of Watsco by 1.4% during the third quarter. State Street Corp now owns 1,238,121 shares of the construction company's stock valued at $500,572,000 after buying an additional 16,595 shares during the last quarter. Geode Capital Management LLC grew its holdings in shares of Watsco by 0.8% during the fourth quarter. Geode Capital Management LLC now owns 638,014 shares of the construction company's stock valued at $214,373,000 after buying an additional 5,176 shares during the last quarter. Finally, M&T Bank Corp grew its holdings in shares of Watsco by 60,779.4% during the fourth quarter. M&T Bank Corp now owns 599,662 shares of the construction company's stock valued at $202,056,000 after buying an additional 598,677 shares during the last quarter. Hedge funds and other institutional investors own 89.71% of the company's stock.

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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