Financial Comparison: Watsco (NYSE:WSO) vs. Capstone Therapeutics (NASDAQ:CAPS)

Watsco (NYSE:WSO) and Capstone Therapeutics (NASDAQ:CAPS) are both industrials companies, but which is the superior business? We will compare the two companies based on the strength of their risk, institutional ownership, earnings, profitability, dividends, valuation and analyst recommendations.

Profitability

This table compares Watsco and Capstone Therapeutics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Watsco	6.53%	14.40%	10.17%
Capstone Therapeutics	-36.51%	-144.43%	-40.48%

Insider and Institutional Ownership

89.7% of Watsco shares are owned by institutional investors. Comparatively, 2.5% of Capstone Therapeutics shares are owned by institutional investors. 12.9% of Watsco shares are owned by insiders. Comparatively, 39.3% of Capstone Therapeutics shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Watsco has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500. Comparatively, Capstone Therapeutics has a beta of -1.52, suggesting that its share price is 252% less volatile than the S&P 500.

Valuation and Earnings

This table compares Watsco and Capstone Therapeutics”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Watsco	$7.24 billion	1.77	$496.99 million	$11.53	26.96
Capstone Therapeutics	$60.25 million	0.06	-$21.23 million	($3.35)	-0.05

Watsco has higher revenue and earnings than Capstone Therapeutics. Capstone Therapeutics is trading at a lower price-to-earnings ratio than Watsco, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for Watsco and Capstone Therapeutics, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Watsco	0	9	2	0	2.18
Capstone Therapeutics	1	0	0	0	1.00

Watsco presently has a consensus target price of $395.50, suggesting a potential upside of 27.22%. Given Watsco’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Watsco is more favorable than Capstone Therapeutics.

Summary

Watsco beats Capstone Therapeutics on 13 of the 14 factors compared between the two stocks.

About Watsco

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 incorporated in 1956 and is headquartered in Miami, Florida.

About Capstone Therapeutics

Capstone Therapeutics Corp., a biotechnology company, develops novel peptides and other molecules for helping patients with under-served medical conditions in the United States. It develops Apo E mimetic peptide molecule AEM-28 and its analogs that have completed Phase Ia and Phase Ib/IIa clinical trials for lipoprotein metabolism. The company was formerly known as OrthoLogic Corp. and changed its name to Capstone Therapeutics Corp. in May 2010. Capstone Therapeutics Corp. was founded in 1987 and is headquartered in Tempe, Arizona.