Tuesday, September 25, 2012

Dividend Machine for week of 9/24/2012 Watsco (WSO)

Air handling unit (AHU)
Air handling unit (AHU) (Photo credit: Wikipedia)

Watsco dividend machine for week of 9/24/2012

          One might think that a company in the HVAC business is no place to invest your money with our housing market in the dumps.   Since I do not use current trends or even long term trends as selection criteria for dividend machines, I did not let that influence my dividend machine choice for this week. I leave that kind of input for you to use to decide if you want to a particular dividend machine or not.

          Last year I found Watsco to be a dividend machine using my four key criteria.  I was not thrilled with the industry, which is heating, ventilation and air conditioning (HVAC), by design I had to include Watsco in my 2011 dividend machine list.

          This year, Watsco (WSO) makes the grade again.   Since I have looked at this company over time, I have an even better feeling for their business.   I like their performance from a product standpoint.  They meet the increasing need and market for energy efficiency. 

          The table below presents Watsco’s four dividend machine criteria.

Watsco (WSO)

Price when profiled
Last 4 Qtrs Earnings
Last 4 Qtrs Dividend
Current Dividend Yld
No. of Years increased
Debt/Equity ratio

          Watsco currently pays a dividend of $2.48 per share per year.  The yield at today’s price of $77.68 is 3.19%.  WSO has paid a dividend every year since 1990 and has increased the dividend every year for ten years.   Watsco is a responsible with leverage and sports a debt to equity ratio (D/E) of .26.

          WSO has some calls but not that I liked well enough to profile today.  However, since I profiled WSO in my 2011 dividend machine list, I was able to write a nice call.  The call was not exercised and I still own the WSO.  These are the kinds of companies that make income investing a good strategy even during times when everyone thought you would never sell another air conditioner again until the housing market recovered.

          Check out the links before to read other posts about WSO.

Very Truly Yours,


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