Critical Survey: Watsco (WSO.B) vs. Thermon Group Holdings (THR)
Watsco (NYSE: WSO.B) and Thermon Group Holdings (NYSE:THR) are both construction companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, valuation, risk, earnings, analyst recommendations, dividends and institutional ownership.
Watsco pays an annual dividend of $5.00 per share. Thermon Group Holdings does not pay a dividend. Watsco pays out 93.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Volatility and Risk
Watsco has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500. Comparatively, Thermon Group Holdings has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500.
Valuation & Earnings
This table compares Watsco and Thermon Group Holdings’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Thermon Group Holdings||$252.47 million||2.12||$37.57 million||$0.38||43.47|
Thermon Group Holdings has higher revenue and earnings than Watsco. Watsco is trading at a lower price-to-earnings ratio than Thermon Group Holdings, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
0.1% of Watsco shares are held by institutional investors. 14.5% of Watsco shares are held by company insiders. Comparatively, 1.2% of Thermon Group Holdings shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
This table compares Watsco and Thermon Group Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Thermon Group Holdings||4.99%||3.88%||2.67%|
This is a breakdown of current recommendations and price targets for Watsco and Thermon Group Holdings, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Thermon Group Holdings||1||0||2||0||2.33|
Thermon Group Holdings has a consensus target price of $21.50, indicating a potential upside of 30.15%.
Thermon Group Holdings beats Watsco on 6 of the 11 factors compared between the two stocks.
Watsco Company Profile
Watsco, Inc. is a distributor of air conditioning, heating and refrigeration equipment, and related parts and supplies (HVAC/R) in the HVAC/R distribution industry in North America. As of December 31, 2016, the Company sold a range of non-equipment products, representing more than 300,000 stock keeping units, including parts, ductwork, air movement products, insulation, tools, installation supplies, thermostats and air quality products. It distributes products consisting of equipment, including residential ducted and ductless air conditioners ranging from 1 to 5 tons, gas, electric and oil furnaces ranging from 50,000 to 150,000 British Thermal Units, commercial air conditioning and heating equipment and systems ranging from 1.5 to 25 tons and other specialized equipment; parts, including replacement compressors and motors, and supplies, including ductwork, grills, registers, sheet metal, adhesives and other ancillary supplies. It also sells products to the refrigeration market.
Thermon Group Holdings Company Profile
Thermon Group Holdings, Inc. is a provider of engineered thermal solutions for process industries. The Company operates through four segments based on four geographic countries or regions: United States, Canada, Europe and Asia. Its product portfolio includes self-regulating and power limiting heating cables, which change heat output as pipe temperature changes, as well as constant wattage heating cables; mineral insulated (MI) cable; skin effect trace heater; heat traced tube bundles for environmental gas sampling systems; heat transfer compounds and steam tracers for steam tracing solutions; control and monitoring systems for electric tracing of pipes, tanks, hoppers and instrument sampling systems; turnkey solutions that provide solutions for heat tracing, including design, optimization, installation and ongoing maintenance; products and services, such as heating, sensing, monitoring, controlling and calibration tools, and temporary electric power distribution and lighting products.
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