Dividend Coverage: This Air Conditioning and Heating Systems Manufacturer Raised Dividend by 19%; Will Trade Ex-Dividend on July 13, 2017

LONDON, UK / ACCESSWIRE / July 12, 2017 / Pro-Trader Daily takes a closer look at Watsco, Inc. (NYSE: WSO) as the Company’s stock will begin trading ex-dividend on July 13, 2017. In order to capture the dividend payout, investors must purchase the stock one day prior to the ex-dividend date that is by latest the end of trading session on July 12, 2017. Are you looking for research on dividend stocks, if so register with us now for your free membership at:

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Today, PRO-TD covers ex-dividend news on WSO. Get our free coverage by signing up at:

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Dividend Declared

On July 03, 2017, Watsco’s Board approved a 19% increase in the annual dividend rate to $5.00 per share and declared a regular quarterly cash dividend of $1.25 on each outstanding share of its Common stock and Class B common stock. The cash dividend is payable on July 31, 2017, to shareholders of record at the close of business on July 17, 2017.

Albert H. Nahmad, Watsco’s Chairman and CEO stated:

“We are pleased to be able to increase dividends to our shareholders. This latest increase reflects our confidence in the business and is supported by our continued cash flow and strong balance sheet.”

Watsco’s indicated dividend represents a yield of 3.24%, substantially higher compared to the average dividend yield of 1.99% for the Services sector. Watsco has paid dividends to shareholders for more than 40 consecutive years and has increased dividend for last 3 years.

Dividend Insights

Watsco has a dividend payout ratio of 88.7%, which indicates that the Company distributes approximately $0.89 for every $1.00 earned. The dividend payout ratio reflects how much money a Company is returning to shareholders versus how much money it is keeping on hand to reinvest in growth, to pay off debt, and/or to add to its cash reserves.

According to analysts’ estimates, Watsco is estimated to report earnings of $6.30 in the coming year, which should comfortably cover the Company’s annualized dividend of $5.00.

As on March 31, 2017, Watsco had cash and cash equivalents worth $47.42 million, while the Company’s current assets totaled $1.30 billion and current liabilities were $378.90 million. Watsco maintains a conservative balance sheet remains with a debt-to-EBITDA of under 1x. The Company is forecasting that its cash flow will exceed net income for FY17. The strong financial position provides a cushion for the Company to absorb any fluctuations in earnings and pay its dividend without interruption.

About the Company

Watsco improves indoor living and working environments with air conditioning and heating solutions that provide comfort regardless of the outdoor climate. There are approximately 92 million central air conditioning and heating systems installed in the United States that have been in service for more than 10 years. Watsco has an opportunity to accelerate the replacement of these systems at a scale greater than our competitors as the movement toward reducing energy consumption and its environmental impact continues.

Watsco’s traditional sales channel is through one of its 561 locations in the United States, Canada, Mexico, and Puerto Rico, and on an export basis to Latin America and the Caribbean. This network has been built over the last 25 years and serves 88,000 active customers. Watsco is developing and investing in technologies to enable sales via e-commerce, on-line marketplaces, and through the retail sales channel.

Recent Development for Watsco

On June 21, 2017, Watsco announced that its Carrier Enterprise business unit, a joint venture between Watsco and Carrier, has acquired 35% ownership of Russell Sigler, Inc.

Russell Sigler, Inc., established in 1950, is one of the largest HVAC distributors in North America with annual sales of approximately $650 million. It serves over 10,000 customers from 30 locations throughout Arizona, California, Idaho, New Mexico, Nevada, and portions of Texas. Products sold include residential and commercial HVAC equipment manufactured by Carrier as well as parts, supplies, and accessories sourced from over 700 vendors. Consideration for the purchase was approximatelyy $63.6 million paid in cash. Watsco has exclusive rights to purchase ownership interests from current shareholders that may elect to sell in the future.

Stock Performance

Watsco’s share price finished yesterday’s trading session at $154.38, marginally advancing 0.55%. A total volume of 244.22 thousand shares have exchanged hands. The Company’s stock price advanced 9.33% in the last three months, 5.32% in the past six months, and 8.22% in the previous twelve months. Additionally, the stock gained 4.23% since the start of the year. Shares of the Company have a PE ratio of 30.07 and currently have a market cap of $5.55 billion.

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