Fastenal vs Watsco
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KIRA’s take AI analyst
I put Fastenal and Watsco side by side, using each one’s latest annual report. Here is what stands out:
- Fastenal is the larger business, with $8.2B of revenue in fiscal 2025 against $7.2B for Watsco.
- Fastenal grew revenue faster (8.7%, against −5.0%).
- Fastenal kept more of each dollar of sales as operating profit (20.2% operating margin, against 10.0%).
- Fastenal turned more of its sales into free cash flow (12.8% FCF margin, against 7.4%).
- Fastenal earned a higher return on the capital invested in it (34.3%, against 20.1%).
- Investors pay more for each dollar of Fastenal’s earnings: a P/E of 42.7x against 26.3x for Watsco.
Who comes out ahead
Of the 11 measures where higher (or lower) is clearly better, how many each company leads.
Fastenal
FAST
10/11
Revenue growth5-year growthGross marginOperating marginNet marginFCF marginReturn on capitalReturn on equityPiotroski F-scoreShare count change
Watsco
WSO
1/11
Net debt / EBITDA
Side by side
Best in the row
| Latest fiscal year | FAST FY25 | WSO FY25 |
|---|---|---|
| Size | ||
| Market cap | $60.3B | $11.7B |
| Revenue | $8.2B | $7.2B |
| Free cash flow | $1.1B | $535M |
| Net income | $1.3B | $497M |
| Growth | ||
| Revenue growth | 8.7% | −5.0% |
| 5-year growth | 7.8% | 7.5% |
| Share count change | 0.2% | 1.0% |
| Profitability | ||
| Gross margin | 45.0% | 28.1% |
| Operating margin | 20.2% | 10.0% |
| Net margin | 15.4% | 6.9% |
| FCF margin | 12.8% | 7.4% |
| Return on capital | 34.3% | 20.1% |
| Return on equity | 33.3% | 18.3% |
| Balance sheet | ||
| Net debt | −$152M | −$255M |
| Net debt / EBITDA | −0.1x | −0.3x |
| Dividends and buybacks | $1.0B | $474M |
| Valuation & quality | ||
| P/E | 42.7x | 26.3x |
| Piotroski F-score | 7 | 6 |
Ten years
Revenue
Operating margin
Free cash flow
Return on capital
Each company's latest fiscal year; fiscal years end in different months. The best value in each row is highlighted where higher (or lower) is clearly better. Not investment advice.