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MIAMI - Watsco, Inc. (NYSE:WSO), a leading distributor of heating, air conditioning, and refrigeration products, announced an increase in its quarterly cash dividend. The company’s Board of Directors declared a dividend of $3.00 per share on its Common and Class B common stock, payable on April 30, 2025, to shareholders of record as of April 15, 2025. This decision represents an 11% increase, bringing the annual dividend rate to $12.00 per share. According to InvestingPro data, Watsco has maintained a strong dividend growth trajectory with a 10.2% dividend growth over the last twelve months and currently offers a 2.12% yield. The company has raised its dividend for 11 consecutive years, demonstrating consistent shareholder returns.
Chairman & CEO Albert H. Nahmad expressed the company’s intention to continue rewarding shareholders, citing a robust balance sheet as the foundation for this confidence. Watsco has a history of consistent dividends, with 51 years of consecutive payouts. The company’s strategy emphasizes sharing cash flow with shareholders while maintaining a conservative financial structure to support growth in its distribution network.
Watsco’s position as the largest distributor in its field extends across the United States, Canada, Mexico, Puerto Rico, and export markets in Latin America and the Caribbean. The company has identified the replacement market as a key area of focus, noting the aging infrastructure of HVAC systems and the shift towards higher efficiency models. With a market capitalization of $19.2 billion and revenue of $7.6 billion in the last twelve months, Watsco demonstrates significant market presence. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading above its intrinsic value, with analysts maintaining mixed views and price targets ranging from $330 to $560. These trends are underscored by data from the Energy Information Administration, which indicates that around 102 million HVAC systems in the U.S. are over a decade old and often fall short of current efficiency standards.
The company also highlighted its role in environmental sustainability, asserting that the sale of higher-efficiency HVAC systems from January 1, 2020, to December 31, 2024, has resulted in an estimated 22.8 million metric tons of reduced CO2e emissions. This figure is equated to the impact of removing approximately 5.3 million gas-powered vehicles from the road annually. The company’s focus on sustainability aligns with its strong operational performance, showing a healthy gross profit margin of 26.8% and return on equity of 20%.
Watsco’s forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995, are based on management’s current expectations and subject to economic and market fluctuations. The company cautions that actual results may vary due to various factors, including market conditions and regulatory changes.
The announcement is based on a press release statement from Watsco, Inc., and reflects the company’s current financial strategy and commitment to shareholder returns against the backdrop of its operational focus and contributions to energy efficiency.
In other recent news, Watsco Inc. reported its fourth-quarter 2024 earnings, exceeding analysts’ expectations with an earnings per share (EPS) of $2.37, compared to a forecast of $2.18. The company also posted a revenue of $1.75 billion, surpassing the anticipated $1.66 billion. This strong performance was attributed to significant growth in equipment and residential product sales, as well as a strategic focus on e-commerce, which now constitutes 35% of annual sales. In light of these results, Watsco announced an 11% increase in its dividend to $12 per share.
Additionally, Mizuho Securities adjusted its financial outlook for Watsco, raising the stock price target to $540 from the previous $480, while maintaining a Neutral rating. Analyst Dan Dolev highlighted Watsco’s impressive sales performance and noted a 16% increase in unit volumes during the quarter. The company is expected to benefit from strong equipment demand and the adoption of A2L refrigerants, which could enhance gross margins.
Looking ahead, Mizuho revised its earnings per share estimates for Watsco, raising the 2025 forecast to $15.25 and the 2026 estimate to $17.00. The firm’s analysis suggests potential for continued financial growth, supported by robust technology platforms and strategic investments. These recent developments underscore Watsco’s solid performance amidst a challenging economic landscape.
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