5 Best Industrial Distribution Stocks to Buy Now

4. Watsco, Inc. (NYSE:WSO)

Number of Hedge Fund Holders: 36

Miami, Florida-based Watsco, Inc. (NYSE:WSO) is a leading heating, air conditioning and refrigeration (HVAC/R) products distributor with a network of 673 locations in the United States, Canada, Mexico, and Puerto Rico. It also distributes its products on an export basis to Latin America and the Caribbean.

On April 20, Watsco, Inc. (NYSE:WSO) released its financial results for Q1 2023. It generated a revenue of $1.55 billion and a net income of $110 million. It generated a normalized EPS of $2.83 which surpassed consensus estimates by $0.44.

Watsco, Inc. (NYSE:WSO) has paid dividends to its shareholders for 49 consecutive years. The latest increase in the dividend payouts for the company came into effect in January as it boosted annual dividends by 11% to $9.80 per share. Its dividends have grown at a CAGR of 21% since the company entered the distribution market in 1989.

This is what SouthernSun Asset Management, LLC, an investment management firm, had to say about Watsco, Inc. (NYSE:WSO) in its Q1 2023 investor letter:

“Watsco Inc. (WSO), the largest distributor of air conditioning, heating and refrigeration products in North America, was the top contributor this quarter, delivering record sales (+5%) and adjusted EPS (+16%) in the fourth quarter and capping off the second consecutive year of strong growth . . . . Overall, we continue to believe Watsco has a long runway for growth, an owner-oriented culture and competitive advantages that increase with scale.”