Pool Corporation (POOL) vs Watsco, Inc. (WSO)

Pool Corporation and Watsco, Inc. are both Industrial Distribution companies. Watsco, Inc. is the larger, with a market value of $11.6B against $5.8B — 2.0× the size. Pool Corporation trades at the lower P/E: 14.6× against 24.4×. Pool Corporation grew revenue faster over the last twelve months: 2.23% against −2.98%. Pool Corporation has the higher net margin (7.37% vs 6.54%) and the higher return on invested capital (14.1% vs 13.6%). Both pay a dividend; Watsco, Inc. yields more (5.65% vs 3.20%). Across the 23 metrics below, Pool Corporation leads on 13 and Watsco, Inc. on 10.

Valuation

Metric POOL WSO Industrial Distribution median
P/E 14.64 24.41 28.59
P/S 1.07 1.47 1.07
P/B 4.57 3.09 3.42
Price to free cash flow 19.12 15.40 21.97
EV/EBITDA 11.13 14.27 14.63
EV/Sales 1.31 1.43 1.26
Earnings yield 6.83% 4.10% 3.20%
Free cash flow yield 5.23% 6.49% 3.97%

Profitability

Metric POOL WSO Industrial Distribution median
Gross margin 29.58% 27.51% 30.34%
Operating margin 10.76% 9.40% 8.06%
Net margin 7.37% 6.54% 4.95%
Free cash flow margin 5.58% 9.57% 4.67%
Return on equity 31.08% 14.23% 14.29%
Return on assets 10.70% 9.71% 5.30%
Return on invested capital 14.10% 13.64% 8.13%

Growth

Metric POOL WSO Industrial Distribution median
Revenue growth (TTM) 2.23% (2.98%) 7.80%
EPS growth (last fiscal year) (3.98%) (7.89%) (3.98%)
Revenue growth, 5-year CAGR 6.09% 7.45% 9.01%
Net income growth, 5-year CAGR 1.98% 15.06% 0.99%

Health

Metric POOL WSO Industrial Distribution median
Debt to equity 1.06 0.04 0.53
Current ratio 2.67 3.20 2.47
Net debt to EBITDA 1.73 (0.95) 1.17

Dividend

Metric POOL WSO Industrial Distribution median
Dividend yield 3.20% 5.65% 1.62%
Payout ratio 0.47 1.38 0.48

Size

Metric POOL WSO Industrial Distribution median
Market cap 5.75b 11.64b 5.75b

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