This Business Breakdowns podcast episode analyzes Watsco, North America's largest HVAC equipment distributor. The hosts interview Caledonia Investments' Lucy Adams and Alan Murran, exploring Watsco's history, its shift from manufacturing to distribution, and its key relationships with OEMs like Carrier. They discuss Watsco's unique employee compensation plan, its market position (11-12% market share), and its growth strategies (organic growth, M&A, joint ventures). A key takeaway is Watsco's highly cash-generative business model and its focus on long-term growth, exemplified by its 20%+ annualized shareholder return over multiple decades. The discussion highlights the importance of a strong ownership culture and the use of technology to improve efficiency and margins.
