Watsco Inc (WSO)
Return on equity (ROE)
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net income (ttm) | US$ in thousands | 536,337 | 591,461 | 578,149 | 597,942 | 601,167 | 542,382 | 525,606 | 477,151 | 418,945 | 386,069 | 351,693 | 294,169 | 269,579 | 260,847 | 237,838 | 241,415 | 245,950 | 248,265 | 243,948 | 243,750 |
| Total stockholders’ equity | US$ in thousands | 2,229,840 | 2,224,010 | 2,037,650 | 1,928,870 | 1,889,240 | 1,908,780 | 1,834,440 | 1,725,210 | 1,664,950 | 1,644,580 | 1,575,700 | 1,491,410 | 1,486,680 | 1,489,610 | 1,437,040 | 1,404,340 | 1,435,430 | 1,443,110 | 1,355,600 | 1,335,210 |
| ROE | 24.05% | 26.59% | 28.37% | 31.00% | 31.82% | 28.42% | 28.65% | 27.66% | 25.16% | 23.48% | 22.32% | 19.72% | 18.13% | 17.51% | 16.55% | 17.19% | 17.13% | 17.20% | 18.00% | 18.26% |
December 31, 2023 calculation
ROE = Net income (ttm) ÷ Total stockholders’ equity
= $536,337K ÷ $2,229,840K
= 24.05%
To analyze Watsco Inc.'s Return on Equity (ROE) over the past eight quarters, we observe a fluctuating trend. The ROE has ranged from 22.40% to 29.11% during this period. The highest ROE was recorded in Q4 2022 at 29.11%, while the lowest was in Q4 2023 at 22.40%.
Overall, Watsco Inc.'s ROE has shown a downward trend from Q4 2022 to Q4 2023. This could be a cause for concern as it indicates a decline in the company's ability to generate profits from shareholders' equity. However, it is important to consider factors such as industry trends, economic conditions, and specific company developments when interpreting this metric.
Further analysis and comparison with industry benchmarks and peer companies' ROE can provide more insights into Watsco Inc.'s performance and competitiveness in the market. Additionally, understanding the drivers behind the changes in ROE, such as changes in profit margins, asset turnover, and leverage, can help in evaluating the company's financial health and efficiency in utilizing its equity capital.