Contrasting Flowserve (FLS) & The Competition

Flowserve (NYSE:FLS) is one of 436 public companies in the “Machinery” industry, but how does it contrast to its peers? We will compare Flowserve to similar companies based on the strength of its analyst recommendations, institutional ownership, valuation, risk, dividends, profitability and earnings.

Analyst Recommendations

This is a breakdown of current recommendations for Flowserve and its peers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Flowserve	0	4	7	0	2.64
Flowserve Competitors	4184	14660	18150	799	2.41

Flowserve currently has a consensus target price of $85.40, indicating a potential upside of 8.33%. As a group, “Machinery” companies have a potential upside of 30.16%. Given Flowserve’s peers higher probable upside, analysts clearly believe Flowserve has less favorable growth aspects than its peers.

Volatility & Risk

Flowserve has a beta of 1.23, suggesting that its stock price is 23% more volatile than the S&P 500. Comparatively, Flowserve’s peers have a beta of 4.53, suggesting that their average stock price is 353% more volatile than the S&P 500.

Valuation & Earnings

This table compares Flowserve and its peers gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Flowserve	$4.73 billion	$346.25 million	27.66
Flowserve Competitors	$4.75 billion	$363.05 million	3.59

Flowserve’s peers have higher revenue and earnings than Flowserve. Flowserve is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Flowserve and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Flowserve	8.01%	21.42%	8.34%
Flowserve Competitors	-1,044.50%	-15.16%	0.53%

Institutional & Insider Ownership

93.9% of Flowserve shares are owned by institutional investors. Comparatively, 51.7% of shares of all “Machinery” companies are owned by institutional investors. 0.7% of Flowserve shares are owned by insiders. Comparatively, 14.3% of shares of all “Machinery” companies are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

Flowserve pays an annual dividend of $0.88 per share and has a dividend yield of 1.1%. Flowserve pays out 30.9% of its earnings in the form of a dividend. As a group, “Machinery” companies pay a dividend yield of 2.7% and pay out 24.7% of their earnings in the form of a dividend. Flowserve has raised its dividend for 1 consecutive years. Flowserve lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Summary

Flowserve peers beat Flowserve on 8 of the 15 factors compared.

About Flowserve

Flowserve Corporation designs, manufactures, distributes, and services industrial flow management equipment in the United States, Canada, Mexico, Europe, the Middle East, Africa, and the Asia Pacific. It operates through Flowserve Pump Division (FPD) and Flow Control Division (FCD) segments. The FPD segment offers custom and pre-configured pumps and pump systems, mechanical seals, auxiliary systems, replacement parts, upgrades, and related aftermarket services; and equipment services, including installation and commissioning services, seal systems spare parts, repairs, advanced diagnostics, re-rate and upgrade solutions, retrofit programs, and machining and asset management solutions, as well as manufactures a gas-lubricated mechanical seal for use in high-speed compressors for gas pipelines and in the oil and gas production and process markets. The FCD segment provides engineered and industrial valve and automation systems, including isolation and control valves, actuation, controls, and related equipment; and equipment maintenance services for flow control systems, including advanced diagnostics, repair, installation, commissioning, retrofit programs, and field machining capabilities. This segment's products are used to control, direct, and manage the flow of liquids, gases, and multi-phase fluids. It primarily serves oil and gas, chemical and pharmaceuticals, power generation, and water management markets, as well as general industries, including mining and ore processing, pulp and paper, food and beverage, and other smaller applications. The company distributes its products through direct sales, distributors, and sales representatives. Flowserve Corporation was founded in 1790 and is headquartered in Irving, Texas.