ARROW ELECTRONICS, INC. vs WATSCO INC, two Distribution stocks. A side-by-side on valuation, growth, margins, returns, and what each price is betting.
Arrow Electronics and Watsco distribute very different goods, electronic components and HVAC equipment, and Watsco runs the far better business: a 6.85% net margin against Arrow's 2.17%, a 15.43% return on equity against 10.66%, and a nearly debt-free balance sheet against Arrow's 0.36 turns. Watsco trades more than double Arrow's earnings multiple, 33.7 times against 15.4, and pays a 2.85% dividend against none. Arrow's appeal is cheapness; Watsco's is quality and income. The pair prices a thin-margin cyclical distributor against a high-margin, dividend-rich one: Arrow trades near book on the electronics cycle, Watsco commands a premium for consistent HVAC-distribution returns, and the valuation gap is the market paying up for durability.
Comparison updated 2026-07-11.
| Metric | ARW | WSO |
|---|---|---|
| Price | $215.03 | $410.75 |
| Market cap | $11.1B | $15.6B |
| Sector | Distribution | Distribution |
| Stage | Growth | Mature |
| Implied growth (priced in) | +4.8% | +19.8% |
| P/E | 15.4 | 33.7 |
| P/B | 1.63 | 4.85 |
| P/S | 0.33 | 2.15 |
| EV/EBITDA | 11.4 | 21.4 |
| Revenue growth | +20.5% | -4.4% |
| Gross margin | 11.5% | 27.9% |
| Operating margin | 3.8% | 7.2% |
| Net margin | 2.2% | 6.8% |
| Return on equity | 10.7% | 15.4% |
| Return on assets | 2.0% | 10.7% |
| Return on invested capital | 8.5% | 16.0% |
| FCF yield | 2.7% | 4.5% |
| Dividend yield | — | 2.9% |
| Debt / equity | 0.36 | 0.11 |
| Current ratio | 1.24 | 3.34 |
| Altman Z (solvency) | 7.44 | 8.60 |
| Piotroski F (quality) | 6 / 9 | 5 / 9 |
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The stronger value is highlighted per metric where one is strictly better on that single number; it is not an overall verdict on either company. For informational and research purposes only. Not investment advice. Not a recommendation to buy, sell, or hold any security. boothcheck is not a registered investment adviser. Past performance does not guarantee future results.