The business behind the dividend
| Measure | WSO | Median | Formula |
|---|---|---|---|
| Return on equity | 17.9% | 11.7% | Net income ÷ shareholders’ equity |
| Return on capital employed | 22.9% | 10.1% | Operating income ÷ (equity + total debt) |
| Owner earnings | $506.20m | $632.00m | Net income + depreciation & amortisation − capital expenditure |
| Free cash flow | $535.06m | $746.10m | Operating cash flow − capital expenditure |
| Operating margin | 10.0% | 15.0% | Operating income ÷ revenue |
| Net margin | 6.9% | 10.2% | Net income ÷ revenue |
| Debt to equity | 0.13x | 0.79x | Total debt ÷ shareholders’ equity |
| Interest cover | — | — | Operating income ÷ interest expense |
| Current ratio | 4.12x | 1.25x | Current assets ÷ current liabilities |
| Long-term debt to working capital | 0.16x | 2.30x | Long-term debt ÷ (current assets − current liabilities) |
| Cash conversion | 1.15x | 1.78x | Operating cash flow ÷ net income |
Ten years of it
The same measures, for every year the filings support. One year is a fact; a row is a business.
| Measure | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | Median |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Return on equity | 17.9% | 20.2% | 24.1% | 31.8% | 25.2% | 18.1% | 17.1% | 18.0% | 16.0% | 18.2% | 18.1% |
| Return on capital employed | 22.9% | 26.1% | 31.4% | 39.0% | 32.2% | 24.6% | 21.0% | 25.1% | 26.8% | 27.8% | 26.1% |
| Operating margin | 10.0% | 10.3% | 10.9% | 11.4% | 10.0% | 7.9% | 7.7% | 8.2% | 8.2% | 8.2% | 8.2% |
| Net margin | 6.9% | 7.0% | 7.4% | 8.3% | 6.7% | 5.3% | 5.2% | 5.3% | 4.8% | 4.3% | 5.3% |
| Debt to equity | 0.13x | 0.13x | 0.14x | 0.13x | 0.17x | 0.10x | 0.22x | 0.10x | 0.02x | 0.23x | 0.13x |
| Current ratio | 4.12x | 3.13x | 3.36x | 2.54x | 2.70x | 3.05x | 3.35x | 4.03x | 3.21x | 3.94x | 3.21x |
| Cash conversion | 1.15x | 1.44x | 1.05x | 0.95x | 0.83x | 1.98x | 1.37x | 0.70x | 1.47x | 1.54x | 1.15x |
How it compares in industrials
Among the 74 industrials companies here measured on free cash flow, Watsco pays out less than 2 of them. The median for that group is 28.1%, against this company’s 88.5%.
Closest on free cash flow
- Illinois Tool Works (ITW) 65.9%
- Royal Caribbean Cruises (RCL) 66.7%
- Stanley Black & Decker (SWK) 72.8%
- United Parcel Service (UPS) 113.3%
Same sector and same denominator, so the figures are comparable. All 81 in industrials →