Watsco (WSO) Boosts Market Presence With Gateway Supply Buyout
Watsco, Inc. WSO, a Miami-based HVAC/R distributor, has solidified its market presence with the successful acquisition of Gateway Supply Company, Inc., a reputable distributor of plumbing and HVAC products.
Shares of Watsco gained 0.99% during the trading session on Sep 6 but dropped 0.3% in the after-hours trading session on the same day.
Gateway Supply, founded in 1964 and headquartered in Columbia, SC, boasts an impressive annual sales figure of approximately $180 million. It caters to around 4,000 customers across 15 locations in South Carolina and one in North Carolina, distributing a vast inventory of more than 40,000 SKUs sourced from more than 600 vendors.
Watsco's forward-thinking approach to this acquisition is evident in its commitment to retain Gateway's leadership under second-generation family members Chris, Sam and David Williams. Furthermore, Watsco plans to fuel Gateway's expansion, tapping its customer-centric digital technology and ensuring seamless support for Gateway's customers and employees, now integrated into the WSO family.
Acquisition – a Growth Driver
Watsco's strategic approach of "buy and build" has proven successful over the years. With this latest acquisition, the company reiterates its commitment to identifying and partnering with exceptional businesses in the HVAC/R industry. By supporting leadership and employees while preserving their culture and legacy, Watsco aims to facilitate aggressive growth plans and motivate teams.
As part of the Watsco family, Gateway Supply will benefit from access to cutting-edge customer-focused technologies. This acquisition reinforces Watsco's dedication to fostering innovation and growth in the HVAC/R industry.
With a history of 68 acquisitions, including many family-owned businesses, Watsco continues to seek opportunities for expansion. As WSO invests in companies like Gateway Supply, its influence in the HVAC/R market is set to grow, ultimately benefiting customers and shareholders alike.
Share Price Performance
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Shares of Watsco have rallied 42.3% in the year-to-date period, underperforming the Zacks Building Products - Air Conditioner and Heating industry’s growth of 48.6%. However, earnings estimates have moved to $14.20 per share from $14.18 over the past 30 days. This depicts analysts’ optimism about the company’s prospects. Watsco has been benefiting from consistent investments in technological advancements and strategic buyouts.
Zacks Rank & Key Picks
Watsco currently carries a Zacks Rank #3 (Hold).
Some other top-ranked stocks from the Construction sector are EMCOR Group, Inc. EME, TopBuild Corp. BLD and Fluor Corporation FLR.
EMCOR currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
EME delivered a trailing four-quarter earnings surprise of 17.2%, on average. Shares of the company have surged 85.2% in the past year. The Zacks Consensus Estimate for EMCOR’s 2023 sales and earnings per share indicates growth of 11.5% and 35.9%, respectively, from the year-ago reported levels.
TopBuild currently sports a Zacks Rank of 1. BLD delivered a trailing four-quarter earnings surprise of 14.1%, on average. Shares of the company have risen 55.5% in the past year.
The Zacks Consensus Estimate for TopBuild’s 2023 sales and earnings per share indicates growth of 3.3% and 6.1%, respectively, from the previous year’s reported levels.
Fluor currently sports a Zacks Rank of 1. FLR delivered a trailing four-quarter negative earnings surprise of 5.3%, on average. Shares of the company have risen 36.4% in the past year.
The Zacks Consensus Estimate for Fluor’s 2023 sales and earnings per share indicates growth of 11.3% and 141.5%, respectively, from the year-ago reported levels.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.
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