QXO, Inc. (QXO) vs Watsco, Inc. (WSO)

QXO, Inc. and Watsco, Inc. are both Industrial Distribution companies. QXO, Inc. and Watsco, Inc. are of similar size ($13.2B and $12.8B). QXO, Inc. has negative trailing earnings, so its P/E is not meaningful; Watsco, Inc. trades at 27.5×. QXO, Inc. grew revenue faster over the last twelve months: 408.3% against −2.98%. Watsco, Inc. has the higher net margin (6.54% vs −6.63%) and the higher return on invested capital (13.6% vs −1.53%). Across the 21 metrics below, Watsco, Inc. leads on 15 and QXO, Inc. on 6.

Valuation

Metric QXO WSO Industrial Distribution median
P/E n/m 27.51 28.81
P/S 0.96 1.66 1.10
P/B 1.02 3.49 3.59
Price to free cash flow 67.87 17.36 22.50
EV/EBITDA 36.85 16.15 15.13
EV/Sales 1.31 1.62 1.31
Earnings yield (7.24%) 3.63% 3.16%
Free cash flow yield 1.47% 5.76% 3.85%

Profitability

Metric QXO WSO Industrial Distribution median
Gross margin 24.03% 27.51% 30.34%
Operating margin (3.40%) 9.40% 8.06%
Net margin (6.63%) 6.54% 4.95%
Free cash flow margin 1.43% 9.57% 4.67%
Return on equity (7.22%) 14.23% 14.29%
Return on assets (3.30%) 9.71% 5.30%
Return on invested capital (1.53%) 13.64% 8.13%

Growth

Metric QXO WSO Industrial Distribution median
Revenue growth (TTM) 408.30% (2.98%) 7.80%
EPS growth (last fiscal year) (472.73%) (7.89%) —
Revenue growth, 5-year CAGR 177.98% 7.45% 9.01%
Net income growth, 5-year CAGR 0.00% 15.06% 0.99%

Health

Metric QXO WSO Industrial Distribution median
Debt to equity 0.59 0.04 0.53
Current ratio 4.11 3.20 2.47
Net debt to EBITDA 4.52 (0.95) 1.17

Dividend

Metric QXO WSO Industrial Distribution median
Dividend yield — 2.38% 1.54%
Payout ratio 0.00 0.63 0.00

Size

Metric QXO WSO Industrial Distribution median
Market cap 12.75b 13.21b 5.60b

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