Dearborn Partners LLC Invests $34.73 Million in Watsco, Inc. $WSO

Dearborn Partners LLC bought a new stake in shares of Watsco, Inc. (NYSE:WSO) in the second quarter, according to its most recent filing with the Securities and Exchange Commission. The institutional investor bought 83,346 shares of the construction company’s stock, valued at approximately $34,733,000. Watsco comprises approximately 1.6% of Dearborn Partners LLC’s portfolio, making the stock its 10th biggest holding. Dearborn Partners LLC owned about 0.20% of Watsco at the end of the most recent reporting period.

A number of other institutional investors and hedge funds have also recently modified their holdings of the business. Capital International Investors grew its stake in shares of Watsco by 103.1% in the 4th quarter. Capital International Investors now owns 4,642,893 shares of the construction company’s stock worth $1,564,423,000 after buying an additional 2,356,998 shares in the last quarter. Charles Schwab Investment Management Inc. raised its position in shares of Watsco by 3.1% during the 4th 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 in the last quarter. State Street Corp lifted its holdings in shares of Watsco by 1.4% in the 3rd quarter. State Street Corp now owns 1,238,121 shares of the construction company’s stock valued at $500,572,000 after acquiring an additional 16,595 shares during the last quarter. Geode Capital Management LLC lifted its holdings in shares of Watsco by 0.8% in the 4th quarter. Geode Capital Management LLC now owns 638,014 shares of the construction company’s stock valued at $214,373,000 after acquiring an additional 5,176 shares during the last quarter. Finally, Markel Group Inc. grew its position in Watsco by 0.8% in the first quarter. Markel Group Inc. now owns 582,169 shares of the construction company’s stock worth $211,787,000 after acquiring an additional 4,500 shares in the last quarter. 89.71% of the stock is owned by hedge funds and other institutional investors.

Analyst Ratings Changes

Several brokerages have weighed in on WSO. Robert W. Baird set a $400.00 price objective on Watsco in a research note on Thursday, July 30th. DA Davidson lowered their price objective on Watsco from $385.00 to $330.00 and set a “neutral” rating for the company in a research note on Thursday, July 30th. Stephens reiterated an “overweight” rating and issued a $485.00 target price on shares of Watsco in a report on Monday, August 17th. Wall Street Zen raised Watsco from a “sell” rating to a “hold” rating in a research report on Saturday, May 2nd. Finally, Morgan Stanley increased their price target on Watsco from $370.00 to $405.00 and gave the company an “equal weight” rating in a report on Friday, July 10th. Two investment analysts have rated the stock with a Buy rating and nine have given a Hold rating to the stock. Based on data from MarketBeat.com, Watsco currently has an average rating of “Hold” and an average target price of $395.50.

Watsco Stock Performance

WSO opened at $313.60 on Friday. The stock has a market cap of $12.94 billion, a price-to-earnings ratio of 27.20 and a beta of 1.05. The stock’s 50 day moving average price is $356.85 and its 200-day moving average price is $383.01. Watsco, Inc. has a one year low of $295.75 and a one year high of $459.00.

Watsco (NYSE:WSO) last issued its earnings results on Wednesday, July 29th. The construction company reported $4.00 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $4.41 by ($0.41). The company had revenue of $2.10 billion for the quarter, compared to analysts’ expectations of $2.14 billion. Watsco had a net margin of 6.53% and a return on equity of 14.40%. The firm’s revenue for the quarter was up 2.1% compared to the same quarter last year. During the same period in the prior year, the firm posted $4.52 earnings per share. As a group, analysts predict that Watsco, Inc. will post 12.21 earnings per share for the current fiscal year.

Watsco Announces Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Friday, July 31st. Stockholders of record on Thursday, July 16th were paid a dividend of $3.30 per share. The ex-dividend date was Thursday, July 16th. This represents a $13.20 dividend on an annualized basis and a dividend yield of 4.2%. Watsco’s dividend payout ratio (DPR) is currently 114.48%.

Watsco Company Profile

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.