Watsco, Inc. (WSO) Stock Price & How to Invest
Last updated July 2026
Short answer
Watsco (WSO) is the largest HVAC and refrigeration equipment distributor in North America, and investors typically frame it as a durable, dividend-paying way to own the essential, replacement-driven HVAC supply chain rather than a fast grower.
WSO stock price
As of 2026-07-23, Watsco, Inc. (WSO) last closed at $359.85, down 25.8% over the past year. Over the past 52 weeks it has traded between $323.51 and $489.97.
Prices are daily closing prices from Yahoo Finance and may be delayed. For the live quote, check your broker or Watsco, Inc.'s investor relations page. Walnut is informational, not investment advice.
What does Watsco, Inc. (WSO) do?
Watsco is a Miami-based distributor of air conditioning, heating, and refrigeration equipment, parts, and supplies, operating a network of roughly 700 locations across North America and holding about 13% share of a highly fragmented HVAC distribution market. It sells primarily to contractors and installers who service and replace residential and commercial systems, so a large portion of demand is non-discretionary replacement rather than new construction. The company has grown for decades by consolidating independent distributors through bolt-on acquisitions while layering on digital tools like its OnCallAir sales platform and e-commerce to deepen contractor relationships.
The investment picture centers on scale, cash generation, and shareholder returns. Watsco carries essentially no debt, funds a large and growing dividend (recently raised about 10% to ~$13.20 per share), and reinvests in technology and acquisitions such as the pending Jackson Supply deal (~$230 million in annual sales, expected to close in Q2 2026). Revenue dipped in 2025 after a strong prior cycle, and 2026 has shown stabilizing, roughly flat-to-slightly-up sales, so the near-term debate is whether the 2026 A2L refrigerant transition and pricing offset soft unit volumes while the stock trades at a premium multiple.
What's driving Watsco, Inc. (WSO)?
1. Replacement-driven demand
Most of Watsco's volume comes from repairing or replacing existing HVAC systems rather than new construction, which makes revenue more resilient across housing cycles. Aging installed equipment and hot-climate exposure in the Sunbelt support a recurring baseline of demand. This is the structural reason distributors like Watsco tend to be steadier than pure new-build suppliers.
2. Consolidation and acquisitions
The North American HVAC distribution market remains highly fragmented, giving Watsco a long runway to acquire independent distributors. The pending Jackson Supply acquisition (~$230 million in annual sales) is a recent example of adding Sunbelt density. A debt-free balance sheet with several hundred million in cash gives management flexibility to keep buying without straining finances.
3. Regulatory technology transition
Starting January 2026, EPA rules phase out R-410A refrigerant in favor of lower-GWP A2L refrigerants like R-32 and R-454B. This transition tends to lift equipment prices and can pull forward or reshape purchasing, which distributors are positioned to capture. Higher unit prices can support revenue even when installed unit counts are soft.
4. Digital and e-commerce leverage
Watsco has invested heavily in digital tools, with e-commerce sales up roughly 16% year over year and its OnCallAir platform gross merchandise value up about 20% to ~$394 million in Q1 2026. These tools aim to raise contractor loyalty and gross margin over time. Digital adoption is a differentiator versus smaller independent distributors.
What are the risks to Watsco, Inc. (WSO)?
Watsco's results are sensitive to housing turnover, weather, and interest rates, all of which can dampen replacement and remodeling activity. Gross margins have plateaued and even ticked down slightly, and international sales have been weak, so profitability gains are not guaranteed. The A2L transition creates inventory and pricing complexity that could pressure margins if mismanaged. The stock trades at a premium earnings multiple, which leaves limited room for error if growth stays flat. Acquisition-led growth also carries integration risk and depends on continued availability of attractive targets at reasonable prices.
How is Watsco, Inc. (WSO) valued? (approximate, July 2026)
A simple financial snapshot. These are approximations and refresh quarterly; for current figures see Watsco, Inc.'s investor relations page or your broker.
- Revenue (TTM): ~$7.2B
- Q1 2026 revenue: ~$1.53B (flat YoY)
- Q1 2026 diluted EPS: ~$1.87
- Market cap: ~$16B
- P/E (TTM): ~31x
- Dividend yield: ~3.5% (~$13.20/share)
Watsco's TTM revenue is roughly $7.2 billion after a modest 2025 decline, with 2026 sales stabilizing near flat. The stock trades at a premium multiple of around 31 times earnings, reflecting its quality and consistency, while offering a dividend yield near 3.5%. At these levels the shares price in continued steady execution rather than a growth acceleration.
Who competes with Watsco, Inc. (WSO)?
HVAC and building products distributors
Ferguson (FERG) and other large building-products distributors compete for contractor spend across HVAC, plumbing, and refrigeration, giving them scale and breadth Watsco must match in specific categories.
Specialty distribution peers
Companies like Core & Main (CNM), SiteOne Landscape Supply (SITE), and GMS (GMS) are comparable consolidator distributors in adjacent construction and infrastructure niches, often used as valuation and strategy comparisons even though products differ.
OEMs and independent distributors
HVAC equipment makers such as Carrier, Trane, and Lennox sell through distribution and set supply terms, while thousands of independent regional distributors remain both competitors and acquisition targets in a fragmented market.
How to invest in Watsco, Inc. (WSO)
There are three common ways to get WSO exposure. Buy shares (or fractional shares) directly at any major broker. Hold an ETF that includes it, which spreads the position across many companies. Or build it into a focused thematic basket, so WSO sits alongside other stocks that express the same thesis.
Walnut takes the basket route. Describe a thesis where WSO fits (for example “AI infrastructure” or “dividend-growth large-caps”) and the AI proposes 5 to 6 constituents with target weights. You review the plan and fund it through your own broker when you're ready.
New to this? Start with how to invest in stocks, see how to analyze a stock with AI, or compare the best AI stock analyzers.
The bottom line on Watsco, Inc. (WSO)
WSO is a scale distributor with a rock-solid balance sheet and a rich valuation, so the case rests on steady replacement demand, technology-transition tailwinds, and continued bolt-on acquisitions.
More on Watsco, Inc. (WSO)
Whether WSO is worth buying today depends more on your time horizon and what you already hold than on any single call. We walk through valuation, what would have to go right, and the risks in is WSO a buy?, and where the stock could go from here in the WSO stock forecast.
For income investors, whether WSO pays a dividend and how the payout looks is covered in does WSO pay a dividend?
Build a basket around WSO with Walnut
Use Watsco, Inc. as one constituent in a thematic basket Walnut's AI helps you assemble. Describe a thesis you believe in, the AI proposes the holdings and weights, and you approve before any broker order.
FAQ
What does Watsco do?
+
Watsco is the largest distributor of heating, ventilation, air conditioning, and refrigeration (HVAC/R) equipment, parts, and supplies in North America. It sells mainly to contractors and installers through a network of roughly 700 locations and controls about 13% of a fragmented market.
Is Watsco a cyclical business?
+
It is partly cyclical but cushioned by replacement demand. Because most HVAC purchases replace failed or aging systems rather than serve new construction, Watsco's revenue tends to be steadier than housing-starts data would suggest, though weather and rates still matter.
How has Watsco performed recently?
+
Full-year 2025 revenue fell about 5% to roughly $7.2 billion after a strong prior cycle. In Q1 2026 revenue was roughly flat year over year at about $1.53 billion with diluted EPS near $1.87, which the company framed as stabilizing markets.
Does Watsco pay a dividend?
+
Yes. Watsco pays a large and growing dividend, recently raised about 10% to roughly $13.20 per share annually, which works out to a yield near 3.5%. The company has a long history of raising its payout.
Why does the 2026 refrigerant transition matter for Watsco?
+
Beginning January 2026, EPA rules phase out R-410A refrigerant in favor of lower-GWP A2L refrigerants like R-32 and R-454B. This shift raises equipment prices and reshapes purchasing, and distributors like Watsco are positioned to move the new products and supplies.
How does Watsco grow?
+
Watsco grows through a mix of same-store gains, price, digital tools, and acquisitions of independent distributors. The pending Jackson Supply deal adds about $230 million in annual Sunbelt sales, illustrating its consolidation strategy in a fragmented market.
Is Watsco's valuation expensive?
+
The stock trades at a premium, around 31 times trailing earnings with a market cap near $16 billion. Some valuation frameworks flag it as modestly above fair value, reflecting a market willing to pay up for its consistency and balance-sheet strength.
What are the main risks to Watsco?
+
Key risks include soft housing turnover and higher rates weighing on demand, plateauing gross margins, weak international sales, execution risk in the A2L transition, and a premium multiple that leaves little room for disappointment if growth stays flat.
Walnut is informational, not investment advice. Financial figures on this page are approximations; always verify current numbers with Watsco, Inc.'s investor relations page or your broker before making investment decisions.