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Watsco WSO Return on invested capital

Return on invested capital at other companies

Lennox International logo
Lennox InternationalLII
34.8%-9.1pp
Trane Technologies logo
Trane TechnologiesTT
31.7%+6.9pp
Ferguson Enterprises logo
Ferguson EnterprisesFERG
19.1%
Carrier Global logo
Carrier GlobalCARR
7.3%+1.2pp
EMCOR Group logo
EMCOR GroupEME
42.7%+0.6pp
Comfort Systems USA logo
Comfort Systems USAFIX
53.8%+17.5pp

Other financials

Income statement

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Revenue$1.5B+0.1%
Gross profit$427.6M-0.5%
Operating income$110.2M-1.8%
Net income$79.1M-1.2%
EPS (diluted)$1.87-3.1%

Balance sheet

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Cash & equivalents$392.7M-9.1%
Total debt$496.3M+4.8%
Total equity$2.8B+3.6%
Total assets$4.6B+4.4%

Cash flow

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Operating cash flow-$18.9M+89.4%
CapEx$7.0M-7.7%
Free cash flow-$25.9M+86.0%

Valuation

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Market cap$16.52B-28.1%
Enterprise value$16.62B-27.7%
P/E33.3×-10.1×
P/S2.3×-0.7×

Profitability

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Gross margin28%+1.1pp
Operating margin9.9%-0.2pp
Net margin6.8%-0.1pp

Returns & leverage

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Return on equity18.3%-2.1pp
Debt / equity0.2×0.0×
Current ratio3.3×+0.1×

Where this comes from

Calculated from Watsco’s reported figures.

Based on trailing twelve months.

The official record: Watsco’s 10-Q, filed May 8, 2026, on SEC EDGAR. View the filing →

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Questions, answered.

What is Watsco's return on invested capital?
Watsco (WSO) reported return on invested capital of 20.5% in Q1 2026.
How has Watsco's return on invested capital changed year-over-year?
Watsco's return on invested capital decreased by 9.2% year-over-year, from 22.6% to 20.5%.
What is the long-term trend for Watsco's return on invested capital?
Over 4 years (2021 to 2025), Watsco's return on invested capital has grown at a -4.2% compound annual growth rate (CAGR), from 98% to 82.7%.
What does return on invested capital mean?
The after-tax return the business earns on all the capital — debt and equity — invested in it.
How do you interpret return on invested capital?
The cleanest measure of business quality: ROIC sustained above the cost of capital creates value, below it destroys value. Compare against WACC, not against zero.
How does return on invested capital compare across companies?
Highly comparable across companies as a quality screen. Sector-sensitive definitions of invested capital mean banks/insurers are best excluded.