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Watsco (WSO) Boosts Shareholders' Return With Dividend Hike

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In a shareholder-friendly move, Watsco, Inc. (WSO - Free Report) raised its quarterly dividend by 10%. The move underscores the company’s sound and stable financial position and its commitment to reward shareholders.

Watsco raised the dividend payout to $1.95 per share (or $7.80 annually) from $1.77 per share (or $7.08 annually). The amount will be paid on Apr 30, 2021, to shareholders of record as of Apr 15.

The company has been paying cash dividends for 47 consecutive years. Notably, in 2019, the company paid dividends of $241 million, up 15% year over year. Operating cash flow for 2020 increased 59% to a record $534 million.

Since 2000, the company’s cumulative cash flow came in at approximately $3.2 billion versus net income of roughly $2.9 billion, surpassing its stated goal of generating cash flow in excess of net income.

Investors always prefer a return-generating stock. Hence, a high-dividend-yielding one is much coveted. It goes without saying that stockholders are always on the lookout for companies with a track record of consistent and incremental dividend payments.

Price Performance

Shares of the company have gained 74.1% in the past year compared with the industry’s 15.3% growth. Also, earnings estimates for 2021 have moved up over the past 30 days. The trend is likely to continue, given strength in the e-commerce business. The company is aggressively leveraging technology platforms to better serve and protect customers as well as employees.

Zacks Rank

Watsco — which shares space with Comfort Systems USA, Inc. (FIX - Free Report) , The AZEK Company Inc. (AZEK - Free Report) and AAON, Inc. (AAON - Free Report) in the Zacks Building Products - Air Conditioner and Heating industry — currently sports a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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