FLOWSERVE CORP (FLS) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:FLS - US34354P1057 - Common Stock
76.9 USD
-0.7 (-0.9%)
76.9 USD
0 (0%)
Overall FLS gets a fundamental rating of 6 out of 10. We evaluated FLS against 132 industry peers in the Machinery industry. While FLS belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. FLS is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
- FLS had positive earnings in the past year.
- FLS had a positive operating cash flow in the past year.
- Each year in the past 5 years FLS has been profitable.
- Of the past 5 years FLS 4 years had a positive operating cash flow.
1.2 Ratios
- With a decent Return On Assets value of 7.77%, FLS is doing good in the industry, outperforming 73.48% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 20.00%, FLS belongs to the top of the industry, outperforming 87.88% of the companies in the same industry.
- FLS has a Return On Invested Capital of 11.00%. This is in the better half of the industry: FLS outperforms 76.52% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for FLS is in line with the industry average of 10.24%.
- The 3 year average ROIC (8.33%) for FLS is below the current ROIC(11.00%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.77% | ||
| ROE | 20% | ||
| ROIC | 11% |
ROA(3y)4.24%
ROA(5y)3.51%
ROE(3y)11.36%
ROE(5y)9.55%
ROIC(3y)8.33%
ROIC(5y)7.79%
1.3 Margins
- FLS's Profit Margin of 9.66% is fine compared to the rest of the industry. FLS outperforms 71.21% of its industry peers.
- FLS's Profit Margin has been stable in the last couple of years.
- The Operating Margin of FLS (11.96%) is better than 60.61% of its industry peers.
- FLS's Operating Margin has been stable in the last couple of years.
- FLS's Gross Margin of 33.72% is in line compared to the rest of the industry. FLS outperforms 58.33% of its industry peers.
- In the last couple of years the Gross Margin of FLS has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.96% | ||
| PM (TTM) | 9.66% | ||
| GM | 33.72% |
OM growth 3Y11.99%
OM growth 5Y0.53%
PM growth 3Y20.37%
PM growth 5Y0.47%
GM growth 3Y2.21%
GM growth 5Y-0.61%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so FLS is still creating some value.
- FLS has about the same amout of shares outstanding than it did 1 year ago.
- The number of shares outstanding for FLS has been increased compared to 5 years ago.
- The debt/assets ratio for FLS is higher compared to a year ago.
2.2 Solvency
- An Altman-Z score of 4.16 indicates that FLS is not in any danger for bankruptcy at the moment.
- FLS has a better Altman-Z score (4.16) than 65.15% of its industry peers.
- FLS has a debt to FCF ratio of 2.36. This is a good value and a sign of high solvency as FLS would need 2.36 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 2.36, FLS is in the better half of the industry, outperforming 73.48% of the companies in the same industry.
- FLS has a Debt/Equity ratio of 0.63. This is a neutral value indicating FLS is somewhat dependend on debt financing.
- With a Debt to Equity ratio value of 0.63, FLS is not doing good in the industry: 61.36% of the companies in the same industry are doing better.
- Although FLS does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.63 | ||
| Debt/FCF | 2.36 | ||
| Altman-Z | 4.16 |
ROIC/WACC1.16
WACC9.52%
2.3 Liquidity
- FLS has a Current Ratio of 2.10. This indicates that FLS is financially healthy and has no problem in meeting its short term obligations.
- FLS's Current ratio of 2.10 is in line compared to the rest of the industry. FLS outperforms 53.03% of its industry peers.
- A Quick Ratio of 1.54 indicates that FLS should not have too much problems paying its short term obligations.
- With a decent Quick ratio value of 1.54, FLS is doing good in the industry, outperforming 67.42% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.1 | ||
| Quick Ratio | 1.54 |
3. Growth
3.1 Past
- FLS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 20.52%, which is quite impressive.
- The Earnings Per Share has been growing slightly by 4.18% on average over the past years.
- FLS shows a small growth in Revenue. In the last year, the Revenue has grown by 3.19%.
- Measured over the past years, FLS shows a small growth in Revenue. The Revenue has been growing by 2.96% on average per year.
EPS 1Y (TTM)20.52%
EPS 3Y24.77%
EPS 5Y4.18%
EPS Q2Q%30.43%
Revenue 1Y (TTM)3.19%
Revenue growth 3Y8.78%
Revenue growth 5Y2.96%
Sales Q2Q%3.65%
3.2 Future
- FLS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.36% yearly.
- FLS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.96% yearly.
EPS Next Y29.51%
EPS Next 2Y22.04%
EPS Next 3Y18.18%
EPS Next 5Y14.36%
Revenue Next Year4.04%
Revenue Next 2Y4.02%
Revenue Next 3Y4.06%
Revenue Next 5Y3.96%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 23.81, FLS is valued on the expensive side.
- Based on the Price/Earnings ratio, FLS is valued a bit cheaper than 63.64% of the companies in the same industry.
- When comparing the Price/Earnings ratio of FLS to the average of the S&P500 Index (28.60), we can say FLS is valued inline with the index average.
- With a Price/Forward Earnings ratio of 19.12, FLS is valued on the expensive side.
- 65.15% of the companies in the same industry are more expensive than FLS, based on the Price/Forward Earnings ratio.
- When comparing the Price/Forward Earnings ratio of FLS to the average of the S&P500 Index (25.83), we can say FLS is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.81 | ||
| Fwd PE | 19.12 |
4.2 Price Multiples
- FLS's Enterprise Value to EBITDA ratio is in line with the industry average.
- FLS's Price/Free Cash Flow ratio is rather cheap when compared to the industry. FLS is cheaper than 83.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.54 | ||
| EV/EBITDA | 16.03 |
4.3 Compensation for Growth
- The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- The decent profitability rating of FLS may justify a higher PE ratio.
- FLS's earnings are expected to grow with 18.18% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.81
PEG (5Y)5.69
EPS Next 2Y22.04%
EPS Next 3Y18.18%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.07%, FLS has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 1.01, FLS pays a bit more dividend than its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.82, FLS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.07% |
5.2 History
- The dividend of FLS has a limited annual growth rate of 2.02%.
- FLS has paid a dividend for at least 10 years, which is a reliable track record.
- FLS has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)2.02%
Div Incr Years1
Div Non Decr Years4
5.3 Sustainability
- 24.35% of the earnings are spent on dividend by FLS. This is a low number and sustainable payout ratio.
- FLS's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP24.35%
EPS Next 2Y22.04%
EPS Next 3Y18.18%
FLOWSERVE CORP / FLS FAQ
What is the ChartMill fundamental rating of FLOWSERVE CORP (FLS) stock?
ChartMill assigns a fundamental rating of 6 / 10 to FLS.
What is the valuation status for FLS stock?
ChartMill assigns a valuation rating of 5 / 10 to FLOWSERVE CORP (FLS). This can be considered as Fairly Valued.
How profitable is FLOWSERVE CORP (FLS) stock?
FLOWSERVE CORP (FLS) has a profitability rating of 7 / 10.
What is the valuation of FLOWSERVE CORP based on its PE and PB ratios?
The Price/Earnings (PE) ratio for FLOWSERVE CORP (FLS) is 23.81 and the Price/Book (PB) ratio is 4.32.
Can you provide the financial health for FLS stock?
The financial health rating of FLOWSERVE CORP (FLS) is 6 / 10.