Wats (WSO) DIvidends Date & History

Key Takeaways

• Watsco, Inc. (WSO) offers a forward dividend yield of 3.00% with an annual rate of $13.20 per share, paid quarterly.
• The company has paid dividends for 52 consecutive years and increased them for 13 straight years.
• Recent quarterly dividend raised 10% to $3.30 per share, payable April 30, 2026 (ex-dividend April 16, 2026).
• Payout ratio of 95.51% is high but supported by strong free cash flow (FCF, cash generated after capital expenditures) of $535 million TTM.
• Yield exceeds HVAC distribution peers like Ferguson (FERG) at 1.4% and W.W. Grainger (GWW) at 0.8%.
• Conservative balance sheet with debt-to-equity ratio of 14.86% supports dividend sustainability.

Dividend Overview

Watsco, Inc. (WSO), the largest North American distributor of heating, ventilation, and air conditioning (HVAC) equipment and related parts, maintains a shareholder-friendly dividend policy. The forward annual dividend is $13.20 per share, yielding 3.00% at a recent stock price of $440.64. Dividends are paid quarterly, with the most recent declaration of $3.30 per share reflecting a 10% increase from prior levels. This positions WSO as a dividend growth stock with above-average yield for its industrial distribution sector, appealing to income-focused investors amid cyclical HVAC demand.

Dividend History and Growth

Watsco has a robust dividend track record, paying uninterrupted quarterly dividends for 52 consecutive years. Total annual payouts have grown steadily: $10.55 in 2024, $11.70 in 2025, and already $3.30 in early 2026 toward an expected $13.20. The company has raised dividends for 13 consecutive years, with recent accelerations including an 11% hike in 2025 and 10% in 2026. This growth aligns with its strategy of sharing excess cash flow while investing in distribution expansion, demonstrating commitment to shareholders since entering HVAC distribution in 1989.

Dividend Sustainability and Payout Ratio

Watsco's payout ratio stands at 95.51%, indicating nearly all earnings—$12.25 diluted EPS (trailing twelve months)—are distributed as dividends. While elevated, sustainability is bolstered by trailing twelve-month operating cash flow of $570 million and FCF of $535 million, comfortably covering the approximate $528 million annual dividend obligation. A low debt-to-equity ratio of 14.86% and current ratio of 4.12 reflect financial stability. Profit margins (6.86%) and return on equity (18.69%) support ongoing coverage, though high payout limits aggressive growth without earnings expansion.

Dividend Compared to Industry Peers

In the industrial distribution sector, particularly HVAC, Watsco's 3.00% yield outperforms key peers. Ferguson (FERG), a major plumbing and HVAC distributor, yields about 1.4%. Broader peers like W.W. Grainger (GWW) at 0.8% and Applied Industrial Technologies (AIT) at 0.7% emphasize growth over yield. Watsco's higher payout and longer payment streak make it stand out for income, though peers offer lower risk via diversified portfolios.

AI Screener

Tickeron’s AI Screener is an AI-powered stock and ETF discovery tool that helps traders and investors filter the market based on technical patterns, fundamentals, trends, volatility, and AI-driven signals. Users can scan thousands of stocks and ETFs using customizable filters such as industry, market capitalization, technical indicators, price patterns, and performance metrics. It excels at identifying dividend stocks, income-focused investments, trending stocks, breakout candidates, and market opportunities more efficiently than manual screening. Explore the AI Screener to streamline your research today.

Is This Stock Attractive for Dividend Investors?

Watsco (WSO) suits income investors seeking a reliable 3% yield in the cyclical HVAC sector, backed by 52 years of payments and recent hikes. Dividend growth enthusiasts may appreciate the 13-year increase streak and cash flow-sharing philosophy, though the 95% payout ratio tempers expectations for rapid acceleration. Conservative long-term holders benefit from low debt and strong FCF coverage, providing resilience in housing and replacement markets. However, high payout and sector sensitivity to interest rates and construction cycles warrant caution for yield-chasers prioritizing ultra-safety. Overall, it fits moderately conservative dividend portfolios balancing yield and growth.

Disclaimer

The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer. Disclaimers and Limitations