Watsco, Inc., together with its subsidiaries, engages in the distribution of air conditioning, heating, refrigeration equipment, and related parts and supplies in the United States and internationally. The company distributes equipment, including residential ducted and ductless air conditioners, such as gas, electric, and oil furnaces; commercial air conditioning and heating equipment systems; and other specialized equipment. It also offers parts comprising replacement compressors, evaporator coils, motors, and other component parts; and supplies, such as thermostats, insulation materials, refrigerants, ductworks, grills, registers, sheet metals, tools, copper tubing, concrete pads, tapes, adhesives, and other ancillary supplies, as well as plumbing and bathroom remodeling supplies. The company serves contractors and dealers that service the replacement and new construction markets for residential and light commercial central air conditioning, heating, and refrigeration systems. Watsco, Inc. was founded in 1945 and is headquartered in Miami, Florida.

Watsco, Inc.

Key Points
A stellar outperforming stock to buy on a dip.
Occidental Petroleum consistently generates strong free cash flow to source its dividend payments.
The sell-off in Campbell’s is mostly justified, but the stock is now drastically discounted.
Two of the most powerful forces in investing are time and price.
An investor with a long-term time horizon can afford to be patient and let an investment thesis play out. But investing in a company at a compelling price can also lead to outsized gains.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »
Folks who don't have a multi-decade-long investment time horizon may feel the need to be extra purposeful with their investment decisions. One way to achieve this is to invest in companies with reasonable valuations that also pay dividends. That way, you get paid to hold shares in a company rather than relying solely on the stock price going up to turn a profit.
Here's why Watsco (NYSE: WSO), Occidental Petroleum (NYSE: OXY), and Campbell's Company (NASDAQ: CPB) stand out as three dividend stocks to load up on now.
Technology will help Watsco keep the acquisition bandwagon rolling
Lee Samaha (Watsco): The heating, ventilation, and air conditioning (HVAC) equipment and parts distributor's stock is up 991% over the last 20 years, 272% over the previous decade, 154% over the last five years, 89% over the last three years, but down 4% in the prior year.
If it looks like a buying opportunity and walks like a buying opportunity, it is a buying opportunity. For those noticing that Watsco's current dividend yield is only 2.7%, also note that if you include dividend payments reinvested in the stock over the last 20 years, it improves the return to a whopping 2,020% -- not a typo!
These stellar returns stem from Watsco's ongoing role as the leading player and consolidator in a highly fragmented industry. Simply put, Watsco is a serial acquirer of small HVAC distributors, which it then integrates into its network, thereby expanding its sales and geographic reach.
The integration of these distributors ultimately improves their operational performance as Watsco adds product lines and scale to the newly added distributors. In addition, this is a key reason to believe it can continue to make value-adding acquisitions: its use of new technology, such as mobile apps, e-commerce websites, and digital technology, to support HVAC contractors and make it easier for them to order parts from Watsco.
As such, the company has long-term growth prospects, not least as long as demand for HVAC equipment servicing is a function of the amount of HVAC equipment installed across the U.S.
Time to gas up on Occidental Petroleum stock while energy prices are low
Scott Levine (Occidental Petroleum): Dropping about 11% (as of this writing), Occidental Petroleum stock hasn't had much to celebrate so far in 2025. In fact, over the past year, shares have had a tough go of it, plunging about 29%.
Some may see the decline and think that they should keep their distance from the exploration and production company; however, those with time on their side will find a great opportunity to act now and grab a quality stock with a secure dividend that currently has a 2.2% forward yield.
Experienced energy investors looking at the decline in Occidental Petroleum's stock likely are unfazed, considering the strong correlation between movements in energy prices and those of upstream energy stocks. If energy prices drop, the exploration and production activities at some lower-margin assets become financially disadvantageous. In light of the 21.5% drop in oil benchmark West Texas Intermediate over the past year, the drop in Occidental Petroleum stock seems a lot less alarming.
Despite the lower energy prices, Occidental Petroleum performed well during the first quarter of 2025. In addition to growing oil and gas production by 18.6% year over year, the company generated $1.2 billion in free cash flow and strengthened its balance sheet with a $2.3 billion reduction in debt.
Amid the current drop in energy prices, potential investors may question the sustainability of the company's dividend, but management has taken a financially prudent approach to rewarding shareholders. Over the past five years, the company has generated ample free cash flow to cover its dividend payments.
And that's not the only perspective suggesting the dividend is secure. Occidental Petroleum has averaged an extremely conservative 20% payout ratio from 2020 through 2024.
With the stock's recent decline, Occidental Petroleum now presents a compelling buying opportunity for patient investors.
This high-yield packaged food giant is a compelling value
Daniel Foelber (Campbell's): While you probably know Campbell's for its soups, you may be unfamiliar with just how beaten-down the packaged food stock is. Campbell's has been serving up investors a healthy portion of disappointment with the stock at a 16-year low.
Part of the reason for the sell-off is that Campbell's is now much more than a soup company, and not necessarily to the benefit of its investors.
In 2017, it completed its $700 million acquisition of Pacific Foods of Oregon -- expanding its portfolio of soups, broths, and plant-based beverages. That deal was fairly on brand with the rest of Campbell's lineup. However, what followed was more out of the box.
In 2018, Campbell's bought Snyder's-Lance for a whopping $6.1 billion -- which was a play in snacks like pretzels, chips, and cookies. It then bought Sovos Brands for $2.7 billion in 2024 -- which gave Campbell's a variety of pasta sauces, dry pasta, frozen entrées and pizzas, and yogurt products.
Combined, these three acquisitions amount to $9.5 billion -- which is more than Campbell's market cap at the time of this writing of $9.3 billion. So, in hindsight, Campbell's clearly overpaid for these brands.
Campbell's has struggled to convert these acquisitions into high-margin sales growth. In fact, its earnings and operating margin are around five-year lows. The good news is that Campbell's still generates a ton of free cash flow, which more than covers its sizable dividend (yielding 5.1%).
Campbell's stock is beyond cheap -- with a 10.5 forward price-to-earnings (P/E) ratio compared to a 10-year median P/E of 19.9.
Add it all up, and now is an incredible opportunity for investors who believe Campbell's can turn its business around to scoop up shares of the packaged food giant.
Should you invest $1,000 in Watsco right now?
Before you buy stock in Watsco, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Watsco wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $674,432!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,005,854!*
Now, it’s worth noting Stock Advisor’s total average return is 1,049% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
*Stock Advisor returns as of July 7, 2025
Daniel Foelber has no position in any of the stocks mentioned. Lee Samaha has no position in any of the stocks mentioned. Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Watsco. The Motley Fool recommends Campbell's and Occidental Petroleum. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

3 Beaten-Down Dividend Stocks for Patient Investors to Buy in July and Hold for Years to Come

CF Bankshares today announced that the Board of Directors of the Company declared an $0.08 per share quarterly cash dividend on its common stock and a corresponding $8.00 per share quarterly cash dividend on its Series D preferred stock. This represents a 14% increase over its previous quarterly dividend. The dividend is payable on July 21, 2025 to shareholders of record as of the close of business on July 11, 2025.
American Financial Group announced that it has declared a regular dividend of $0.80 per share of American Financial Group Common Stock. The dividend is payable on July 25, 2025, to holders of record on July 15, 2025.
The Board of Directors of GE HealthCare Technologies today declared a cash dividend of $0.035 per share of Common Stock for the second quarter of 2025 payable on August 15, 2025 to all shareholders of record as of July 25, 2025.
Watsco's Board of Directors has declared a regular quarterly cash dividend of $3.00 on each outstanding share of its Common and Class B common stock payable on July 31, 2025 to shareholders of record at the close of business on July 16, 2025. Watsco has paid dividends to shareholders for 51 consecutive years, with this quarter marking the 200th consecutive quarter of dividend payments.
Kayne Anderson Energy Infrastructure Fund announced today a monthly distribution of $0.08 per share for July 2025. This distribution is payable to common stockholders on July 31, 2025
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Daily Dividend Report: CFBK,AFG,GEHC,WSO,KYN

Guessing Market Caps and Learning About Stocks

The DividendRank formula at Dividend Channel ranks a coverage universe of thousands of dividend stocks, according to a proprietary formula designed to identify those stocks that combine two important characteristics — strong fundamentals and a valuation that looks inexpensive. Watsco Inc. (Symbol: WSO) presently has an above average rank, in the top 50% of the coverage universe, which suggests it is among the top most "interesting" ideas that merit further research by investors.
But making Watsco Inc. an even more interesting and timely stock to look at, is the fact that in trading on Friday, shares of WSO entered into oversold territory, changing hands as low as $419.94 per share. We define oversold territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30. In the case of Watsco Inc., the RSI reading has hit 28.9 — by comparison, the universe of dividend stocks covered by Dividend Channel currently has an average RSI of 51.7. A falling stock price — all else being equal — creates a better opportunity for dividend investors to capture a higher yield. Indeed, WSO's recent annualized dividend of 12/share (currently paid in quarterly installments) works out to an annual yield of 2.83% based upon the recent $423.41 share price.
A bullish investor could look at WSO's 28.9 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. Among the fundamental datapoints dividend investors should investigate to decide if they are bullish on WSO is its dividend history. In general, dividends are not always predictable; but, looking at the history chart below can help in judging whether the most recent dividend is likely to continue.
Click here to find out what 9 other oversold dividend stocks you need to know about »
Also see:
Stock Options Channel
ETFs Holding FTV
Funds Holding TRIN
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Relative Strength Alert For Watsco

(RTTNews) - Watsco, Inc. (WSO) Monday announced that it has completed the acquisition of Southern Ice Equipment Distributors along with two additional transactions in 2025, further expanding its presence in the high-growth Sunbelt region.
Financial terms of the deals were not disclosed.
Southern Ice, founded in 1984 and headquartered in Lafayette, Louisiana, is a key distributor of food-service and commercial refrigeration equipment, parts, and supplies. Its product portfolio includes items from Manitowoc Ice, a Pentair plc division.
Operating across seven locations in Louisiana, Mississippi, Arkansas, Texas, New Mexico, and Arizona, Southern Ice will retain its brand name and leadership team to ensure business continuity and maintain strong relationships with customers and OEM partners.
Earlier in 2025, Watsco also acquired Lashley & Associates, a Houston-based distributor of commercial supplies and custom air movement products, in January, and Hawkins HVAC Distributors, with locations in Charlotte, North Carolina, and Columbia, South Carolina, in April.
These acquisitions have added 10 locations and approximately $47 million in annualized sales. They broaden Watsco's product offerings, brand portfolio, and distribution network across key markets.
Chairman and CEO Albert H. Nahmad expressed enthusiasm about integrating these businesses, highlighting plans to invest in their growth, apply Watsco's advanced technology platforms, and support employees and customers within the expanded Watsco family.
Watsco continues to pursue growth through acquisitions. Since 1989, it has completed 72 deals, emphasizing a "buy and build" approach that supports leadership continuity, fosters growth ambitions, promotes a culture of ownership, and encourages innovation through collaboration.
WSO is currently trading at $478.65 or 1.39% higher on the NYSE.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Watsco Expands Sunbelt Footprint With Three Strategic Acquisitions In 2025

April 05, 2025 — 06:45 am EDT
Written by Daniel Foelber, Scott Levine, Lee Samaha for The Motley Fool->
Buying and holding a stock over the long term requires conviction that the company will live up to investor expectations.
For growth stocks, that can mean unlocking the potential of a paradigm-shifting technology. In contrast, investors may expect dividend-paying companies to steadily boost their earnings and payouts over time, rewarding them with a one-two punch of passive income and capital gains.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »
Here's why Lockheed Martin (NYSE: LMT), American Water Works (NYSE: AWK), and Watsco (NYSE: WSO) stand out as ultra-reliable dividend stocks to buy now.
The sell-off in Lockheed Martin is a buying opportunity
Daniel Foelber (Lockheed Martin): Defense companies that contract with the U.S. government and its allies can be highly reliable cash cows that generate stable income no matter what the economy is doing. But not all defense contractors have a high dividend yield.
Lockheed Martin is an exception. Twenty-two consecutive years of dividend increases paired with a beaten-down stock price have pushed Lockheed's yield up to 3% -- making it a solid source of passive income. That's a far higher yield than peers like RTX and Northrop Grumman.
The stock has sold off because earnings have been weak, the company reported losses from classified programs, and it lost a sizable contract to Boeing that many thought Lockheed was favored to win. These factors contribute to lackluster guidance, but that doesn't affect Lockheed's ability to pay and grow its dividend, given the company's reasonable payout ratio of 57%.
In addition to the dividend, Lockheed consistently buys back a ton of stock, allowing earnings per share (EPS) to grow faster than net income. Over the last decade, EPS has doubled while net income is up by half as much thanks to a 25% reduction in the share count. Buybacks can help keep a stock valuation in check because there are fewer shares and, therefore, more earnings per share.
Lockheed has a price-to-earnings ratio of just 20 -- which is a good price for a reliable dividend-paying company, especially considering that Lockheed's P/E accounts for one-off losses from the classified programs. All told, Lockheed is a balanced buy for risk-averse investors interested in boosting their passive income.
For dependable dividends, get your feet wet with American Water Works
Scott Levine (American Water Works): Finding stocks that have the resilience to continue paying dividends for decades is no easy feat, but it becomes easier when attention turns to American Water Works and its 2.1% forward dividend yield. The water utility stock generates steady revenue from its regulated water operations -- a business model that is about as dependable as they come -- appealing to those interested in a stream of passive income that will continue flowing for years to come.
Serving more than 14 million customers, American Water Works is the largest water utility in the United States. While contracts with the U.S. government are one source of sales, the company's regulated business provides the lion's share of the company's operating revenue -- about 92%. Since regulated water customers provide a steady revenue stream, the company benefits from dependable cash flows that, in turn, provide management with the ability to plan accordingly for capital expenditures like infrastructure upgrades, acquisitions, and, of course, dividends.
Over the past five years, American Water Works has boosted its dividend at an 8.9% annual rate -- and management is keen on keeping this rate moving forward. In concert with its annual earnings-per-share (EPS) growth target of 7% to 9%, management has targeted long-term dividend growth of 7% to 9% each year.
Further demonstrating its commitment to returning capital to shareholders, management has set a payout ratio goal of 55% to 60%. This certainly seems like a realistic aspiration considering the company has averaged a 55% payout ratio over the past 10 years. American Water Works is a solid choice for dividend stocks with real staying power.
A relentless earnings and dividend grower
Lee Samaha (Watsco): This heating, ventilation, air conditioning, and refrigeration (HVACR) parts and supplies distributor is the largest player in a highly fragmented market in the U.S.
As such, its "buy and build" business model revolves around the relentless pursuit of acquisitions of much smaller distributors. After acquiring them, Watsco integrates them into its distribution network so they benefit from the company's scale, products, and technology. It's a win-win scenario that expands Watsco's geographic reach and sales in the process.
The technology is a key distinguishing feature, with Watsco offering mobile applications for customers and digital sales platforms for technicians to quickly order the parts they need to repair equipment.
Consolidating the HVACR parts distribution industry may not sound like the sexiest business going, but Watsco shareholders won't care. The stock has outperformed the S&P 500 over the last year, three years, five years, and 10 years, too. In fact, it's up an incredible 1,110% over the past 20 years, and management has increased the dividend significantly over time.
As the installed base of HVACR equipment continues to grow, demand for parts will likely grow, too, and if history is a guide, so will Watsco's earnings and dividends.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $263,993!*
Apple: if you invested $1,000 when we doubled down in 2008, you’d have $38,523!*
Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $494,557!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
Continue »
*Stock Advisor returns as of April 1, 2025
Daniel Foelber has no position in any of the stocks mentioned. Lee Samaha has no position in any of the stocks mentioned. Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Watsco. The Motley Fool recommends Lockheed Martin and RTX. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

3 No-Brainer Dividend Stocks to Buy and Hold for Decades to Come

TJX today announced that its Board of Directors has raised the amount of its quarterly dividend by 13% from the last dividend paid. The Board declared a regular quarterly dividend in the amount of $.425 per share, payable June 5, 2025, to shareholders of record on May 15, 2025.
Watsco's Board of Directors has declared a regular quarterly cash dividend of $3.00 on each outstanding share of its Common and Class B common stock payable on April 30, 2025 to shareholders of record at the close of business on April 15, 2025. This marks an 11% increase to an annual rate of $12.00 per share. Watsco has paid dividends to shareholders for 51 consecutive years.
RPM International today announced that its board of directors declared a regular quarterly cash dividend of $0.51 per share, payable on April 30, 2025, to stockholders of record as of April 17, 2025.
Trinity Industries has declared a quarterly dividend of 30 cents per share on its $0.01 par value common stock. The quarterly cash dividend, representing Trinity's 244th consecutively paid dividend, is payable April 30, 2025 to stockholders of record on April 15, 2025.
American Financial Group announced that it has declared a regular dividend of $0.80 per share of American Financial Group Common Stock. The dividend is payable on April 25, 2025, to holders of record on April 15, 2025.
VIDEO: Daily Dividend Report: TJX,WSO,RPM,TRN,AFG
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Daily Dividend Report: TJX,WSO,RPM,TRN,AFG

A month has gone by since the last earnings report for Watsco (WSO). Shares have lost about 0.7% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Watsco due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, Watsco has a strong Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Watsco has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Watsco is part of the Zacks Building Products - Air Conditioner and Heating industry. Over the past month, Carrier Global (CARR), a stock from the same industry, has gained 2.6%. The company reported its results for the quarter ended December 2024 more than a month ago.
Carrier Global reported revenues of $5.15 billion in the last reported quarter, representing a year-over-year change of +0.9%. EPS of $0.54 for the same period compares with $0.53 a year ago.
For the current quarter, Carrier Global is expected to post earnings of $0.57 per share, indicating a change of -8.1% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.6% over the last 30 days.
Carrier Global has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Watsco, Inc. (WSO) : Free Stock Analysis Report
Carrier Global Corporation (CARR) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Why Is Watsco (WSO) Down 0.7% Since Last Earnings Report?

Lennar Corporation LEN is slated to report first-quarter fiscal 2025 results (ended Feb. 28) after the closing bell on Mar. 20.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
In the last reported quarter, the company’s earnings and total revenues missed the Zacks Consensus Estimate by 3.1% and 2.1%, respectively. Notably, this Miami-based homebuilder surpassed earnings expectations in three of the trailing four quarters and missed on other occasion, with the average surprise being 6.6%.
How Are Estimates Placed for Lennar Stock?
The Zacks Consensus Estimate for LEN’s earnings per share (EPS) has remained unchanged at $1.76 over the past 60 days. The estimated figure indicates a decrease of 31.5% from the year-ago profit level of $2.57 per share.
The consensus estimate for revenues is pegged at $7.51 billion, indicating a 2.7% increase from the year-earlier level.
Lennar Corporation Price and EPS Surprise
Factors That May Influence Lennar’s Quarterly Results
Lennar’s first-quarter fiscal 2025 is expected to be challenging, with revenue growth but a decline in EPS and margins. Mortgage rate volatility and soft demand in December 2024 and January 2025 may weigh on the company's performance, though a seasonal rebound in February could provide some relief.
During the fiscal first quarter, the 30-year fixed mortgage rate (per Freddie Mac) has tallied between 6.60% and 7.04%. This indicates an affordability issue for homebuyers as they struggle to make home-buying decisions while navigating through increased borrowing costs.
Synergies, such as the dynamic pricing model and digital marketing strategies, alongside increased incentives approach and mortgage rate buydowns, are likely to have supported the company’s underlying prospects. However, the current uncertainties surrounding the housing market are expected to have overshadowed its efforts to target a solid top-line performance.
LEN expects home deliveries during the quarter between 17,000 and 17,500 homes, depicting an increase from 16,798 homes delivered in the year-ago period. Delivery ASP is expected to be between $410,000 and $415,000 compared with $413,000 reported a year ago. Our model predicts home deliveries to be up 3.4% to 17,362 units, with the ASP of the delivered units declining 0.3% to $410,580.
For the quarter, we expect home sales to grow 3.3% year over year to $7.1 billion. Homebuilding revenues are expected to be $7.16 billion, up 3.3% year over year.
New Orders & Backlog
Lennar expects new orders to be in the range of 17,500-18,000 units, down from 18,176 homes reported a year ago. Our estimate for new orders is currently pegged at 17,813 homes, indicating a 2% decline from a year ago. In high-rate scenarios, affordability issues have been a real cause of concern.
Our model predicts a backlog (units and values) of 12,084 homes or $5.85 billion compared with the year-ago quarter’s figures of 16,270 units or $7.43 billion.
Margins
The bottom line of Lennar is expected to have trended south due to its increased approach toward high sales incentives, lower ASP of home deliveries, decreased revenues per square and increased land costs. The company expects the homebuilding gross margin to remain between 19.0% and 19.25%, indicating a decline year over year from 21.8%. Higher mortgage rates likely pressured Lennar’s ability to maintain strong pricing.
Meanwhile, Lennar expects homebuilding selling, general and administrative (SG&A) expenses, as a percentage of home sales, to be in the range of 8.7-8.8%. Our model predicts homebuilding SG&A to be 8.8% in the quarter compared with the year-ago quarter’s figure of 8.2%.
Financial Services operating earnings are expected to be $100-$110 million. Our model predicts the metric to decline 17.3% to $108.6 million.
Strategic Moves
One of the biggest strategic shifts Lennar has undertaken is its spinoff of land assets into a REIT called Millrose. This move may affect its balance sheet and financial reporting. Additionally, Lennar’s investment in Opendoor and other equity holdings may play a role in the company's long-term financial strategy.
What Our Quantitative Model Predicts for LEN Stock
Our proven model does not conclusively predict an earnings beat for Lennar this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Lennar currently carries a Zacks Rank #3.
Stocks With the Favorable Combination
Here are some other companies in the Zacks Construction sector that, per our model, also have the right combination of elements to beat on earnings in the quarter to be reported.
NVR, Inc. NVR has an Earnings ESP of +4.79% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
NVR reported better-than-expected earnings in two of the last four quarters and missed twice, the average surprise being 4.6%. The company’s earnings for the quarter-to-be-reported are expected to decrease 4.8%.
Watsco, Inc. WSO currently has an Earnings ESP of +2.58% and a Zacks Rank of 3.
WSO’s earnings for the quarter-to-be-reported are expected to increase 5.1%. The company reported better-than-expected earnings in one of the last four quarters and missed thrice, the average negative surprise being 2.8%.
KBR, Inc. KBR currently has an Earnings ESP of +0.38% and a Zacks Rank of 3.
KBR’s earnings for the quarter-to-be-reported are expected to increase 14.3%. The company reported better-than-expected earnings in each of the last four quarters, the average surprise being 6.5%.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Watsco, Inc. (WSO) : Free Stock Analysis Report
KBR, Inc. (KBR) : Free Stock Analysis Report
Lennar Corporation (LEN) : Free Stock Analysis Report
NVR, Inc. (NVR) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Watsco, Inc.

About

Capitalization

Shares outstanding

Sector

Industry

ISIN

Lot size

CEO

Website