Why Watsco Is Poised to Outperform

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, air conditioning, heating, and refrigeration equipment manufacturer Watsco (NYSE: WSO  ) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Watsco and see what CAPS investors are saying about the stock right now.

Watsco facts

Headquarters (Founded)

Miami (1945)

Market Cap

$2.5 billion

Industry

Electronics wholesale

Trailing-12-Month Revenue

$3.3 billion

Management

Chairman/CEO Albert Nahmad
CFO Ana Menendez

Return on Equity (Average, Past 3 Years)

13%

Cash/Debt

$46.0 million / $202.2 million

Dividend Yield

3.2%

Competitors

Gensco
Gustave A. Larson
Johnson Controls
(NYSE: JCI  )

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 94% of the 199 members who have rated Watsco believe the stock will outperform the S&P 500 going forward.

Just last week, one of those Fools, PaulB102, tapped the stock as an attractive long-term, total-return opportunity:

Watsco is an extremely shareholder friendly company. Management salaries are reasonable and [the] company does not award huge amounts in options to top management.

I bought 300 shares of [Watsco] for $9,000 in 2004 when it was recommended by Motley Fool as "Top Ten Stocks" to Buy for the year (way before I subscribed to any Motley Fool publication). Today with reinvested dividends, my [Watsco stock] is worth over $32,000 (3.5 bagger after 8 years). Looking forward, there will always be a demand for air conditioning products even more with warming [weather] trends.

If you want market-topping returns, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future. Of course, despite its five-star rating, Watsco may not be your top choice.

If that's the case, we've compiled a special free report for investors called "The 3 Dow Stocks Dividend Investors Need," which uncovers a few other juicy income opportunities. The report is 100% free, but it won't be around forever, so click here to access it now.

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