FLOWSERVE CORP (FLS) Stock Fundamental Analysis
NYSE:FLS - New York Stock Exchange, Inc. - US34354P1057 - Common Stock - Currency: USD
Overall FLS gets a fundamental rating of 5 out of 10. We evaluated FLS against 128 industry peers in the Machinery industry. FLS has only an average score on both its financial health and profitability. FLS has a decent growth rate and is not valued too expensively.
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.
Of the past 5 years FLS 4 years were profitable.
The reported operating cash flow has been mixed in the past 5 years: FLS reported negative operating cash flow in multiple years.
1.2 Ratios
FLS has a Return On Assets (5.08%) which is comparable to the rest of the industry.
FLS has a better Return On Equity (13.04%) than 63.20% of its industry peers.
With a decent Return On Invested Capital value of 10.36%, FLS is doing good in the industry, outperforming 72.00% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for FLS is below the industry average of 11.00%.
The last Return On Invested Capital (10.36%) for FLS is above the 3 year average (6.46%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.08% | ||
| ROE | 13.04% | ||
| ROIC | 10.36% |
ROA(3y)3.42%
ROA(5y)3.45%
ROE(3y)8.99%
ROE(5y)9.47%
ROIC(3y)6.46%
ROIC(5y)7.03%
1.3 Margins
FLS has a Profit Margin (5.90%) which is comparable to the rest of the industry.
In the last couple of years the Profit Margin of FLS has grown nicely.
The Operating Margin of FLS (11.07%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of FLS has grown nicely.
FLS has a Gross Margin (31.50%) which is comparable to the rest of the industry.
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 | 11.07% | ||
| PM (TTM) | 5.9% | ||
| GM | 31.5% |
OM growth 3Y-0.38%
OM growth 5Y7.94%
PM growth 3Y11.48%
PM growth 5Y9.67%
GM growth 3Y-1.28%
GM growth 5Y-0.66%
2. Health
2.1 Basic Checks
FLS has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
There is no outstanding debt for FLS. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
FLS has an Altman-Z score of 3.96. This indicates that FLS is financially healthy and has little risk of bankruptcy at the moment.
FLS has a better Altman-Z score (3.96) than 66.40% of its industry peers.
FLS has a debt to FCF ratio of 3.54. This is a good value and a sign of high solvency as FLS would need 3.54 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.54, FLS is in the better half of the industry, outperforming 62.40% of the companies in the same industry.
A Debt/Equity ratio of 0.57 indicates that FLS is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.57, FLS is doing worse than 62.40% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.57 | ||
| Debt/FCF | 3.54 | ||
| Altman-Z | 3.96 |
ROIC/WACC0.99
WACC10.45%
2.3 Liquidity
A Current Ratio of 1.99 indicates that FLS should not have too much problems paying its short term obligations.
With a Current ratio value of 1.99, FLS perfoms like the industry average, outperforming 43.20% of the companies in the same industry.
FLS has a Quick Ratio of 1.39. This is a normal value and indicates that FLS is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of FLS (1.39) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.99 | ||
| Quick Ratio | 1.39 |
3. Growth
3.1 Past
FLS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 28.57%, which is quite impressive.
The Earnings Per Share has been growing slightly by 4.18% on average over the past years.
EPS 1Y (TTM)28.57%
EPS 3Y24.77%
EPS 5Y4.18%
EPS Q2Q%2.94%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%1.3%
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 14.03% yearly.
The Revenue is expected to grow by 4.31% on average over the next years.
EPS Next Y21.42%
EPS Next 2Y18.08%
EPS Next 3Y15.35%
EPS Next 5Y14.03%
Revenue Next Year8.57%
Revenue Next 2Y5.83%
Revenue Next 3Y5.32%
Revenue Next 5Y4.31%
3.3 Evolution
When comparing the EPS 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 20.51, FLS is valued on the expensive side.
Based on the Price/Earnings ratio, FLS is valued a bit cheaper than 61.60% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 30.30. FLS is valued slightly cheaper when compared to this.
With a Price/Forward Earnings ratio of 16.90, FLS is valued correctly.
69.60% of the companies in the same industry are more expensive than FLS, based on the Price/Forward Earnings ratio.
FLS is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 23.06, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.51 | ||
| Fwd PE | 16.9 |
4.2 Price Multiples
FLS's Enterprise Value to EBITDA is on the same level as the industry average.
70.40% of the companies in the same industry are more expensive than FLS, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.76 | ||
| EV/EBITDA | 13.94 |
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.
FLS's earnings are expected to grow with 15.35% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.96
PEG (5Y)4.91
EPS Next 2Y18.08%
EPS Next 3Y15.35%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.42%, FLS has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.67, FLS pays a bit more dividend than its industry peers.
Compared to the average S&P500 Dividend Yield of 2.29, FLS is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.42% |
5.2 History
The dividend of FLS has a limited annual growth rate of 1.06%.
FLS has been paying a dividend for at least 10 years, so it has a reliable track record.
FLS has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)1.06%
Div Incr Years1
Div Non Decr Years4
5.3 Sustainability
FLS pays out 40.73% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of FLS is growing, but earnings are growing more, so the dividend growth is sustainable.
DP40.73%
EPS Next 2Y18.08%
EPS Next 3Y15.35%
55.39
-2.07 (-3.6%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners98.69%
Inst Owner Change1.73%
Ins Owners0.41%
Ins Owner Change-0.14%
Market Cap7.28B
Analysts82.5
Price Target72.22 (30.38%)
Short Float %1.78%
Short Ratio1.96
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.42% |
Yearly Dividend0.8
Dividend Growth(5Y)1.06%
DP40.73%
Div Incr Years1
Div Non Decr Years4
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.55%
Min EPS beat(2)2.55%
Max EPS beat(2)14.54%
EPS beat(4)4
Avg EPS beat(4)12.79%
Min EPS beat(4)2.55%
Max EPS beat(4)22.16%
EPS beat(8)8
Avg EPS beat(8)21.24%
EPS beat(12)9
Avg EPS beat(12)4.22%
EPS beat(16)10
Avg EPS beat(16)3.38%
Revenue beat(2)1
Avg Revenue beat(2)0.53%
Min Revenue beat(2)-0.43%
Max Revenue beat(2)1.48%
Revenue beat(4)3
Avg Revenue beat(4)1.51%
Min Revenue beat(4)-0.43%
Max Revenue beat(4)3.77%
Revenue beat(8)7
Avg Revenue beat(8)3.83%
Revenue beat(12)7
Avg Revenue beat(12)1.67%
Revenue beat(16)9
Avg Revenue beat(16)1.28%
PT rev (1m)2.91%
PT rev (3m)18.59%
EPS NQ rev (1m)-0.76%
EPS NQ rev (3m)-0.51%
EPS NY rev (1m)-0.58%
EPS NY rev (3m)-1.25%
Revenue NQ rev (1m)-0.16%
Revenue NQ rev (3m)0.08%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)0.04%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.51 | ||
| Fwd PE | 16.9 | ||
| P/S | 1.6 | ||
| P/FCF | 20.76 | ||
| P/OCF | 17.22 | ||
| P/B | 3.54 | ||
| P/tB | 9.73 | ||
| EV/EBITDA | 13.94 |
EPS(TTM)2.7
EY4.87%
EPS(NY)3.28
Fwd EY5.92%
FCF(TTM)2.67
FCFY4.82%
OCF(TTM)3.22
OCFY5.81%
SpS34.58
BVpS15.64
TBVpS5.69
PEG (NY)0.96
PEG (5Y)4.91
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.08% | ||
| ROE | 13.04% | ||
| ROCE | 13.11% | ||
| ROIC | 10.36% | ||
| ROICexc | 12.32% | ||
| ROICexgc | 20.73% | ||
| OM | 11.07% | ||
| PM (TTM) | 5.9% | ||
| GM | 31.5% | ||
| FCFM | 7.72% |
ROA(3y)3.42%
ROA(5y)3.45%
ROE(3y)8.99%
ROE(5y)9.47%
ROIC(3y)6.46%
ROIC(5y)7.03%
ROICexc(3y)7.64%
ROICexc(5y)8.6%
ROICexgc(3y)13.42%
ROICexgc(5y)15.28%
ROCE(3y)8.18%
ROCE(5y)8.9%
ROICexcg growth 3Y1.97%
ROICexcg growth 5Y6.73%
ROICexc growth 3Y4.12%
ROICexc growth 5Y9.02%
OM growth 3Y-0.38%
OM growth 5Y7.94%
PM growth 3Y11.48%
PM growth 5Y9.67%
GM growth 3Y-1.28%
GM growth 5Y-0.66%
F-Score7
Asset Turnover0.86
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.57 | ||
| Debt/FCF | 3.54 | ||
| Debt/EBITDA | 2 | ||
| Cap/Depr | 85.78% | ||
| Cap/Sales | 1.58% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 72.04% | ||
| Profit Quality | 130.9% | ||
| Current Ratio | 1.99 | ||
| Quick Ratio | 1.39 | ||
| Altman-Z | 3.96 |
F-Score7
WACC10.45%
ROIC/WACC0.99
Cap/Depr(3y)73.11%
Cap/Depr(5y)69.55%
Cap/Sales(3y)1.74%
Cap/Sales(5y)1.74%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)28.57%
EPS 3Y24.77%
EPS 5Y4.18%
EPS Q2Q%2.94%
EPS Next Y21.42%
EPS Next 2Y18.08%
EPS Next 3Y15.35%
EPS Next 5Y14.03%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%1.3%
Revenue Next Year8.57%
Revenue Next 2Y5.83%
Revenue Next 3Y5.32%
Revenue Next 5Y4.31%
EBIT growth 1Y29.22%
EBIT growth 3Y4.64%
EBIT growth 5Y10.54%
EBIT Next Year51.74%
EBIT Next 3Y24.33%
EBIT Next 5Y17.83%
FCF growth 1Y554.12%
FCF growth 3Y0.69%
FCF growth 5Y19.33%
OCF growth 1Y4135.06%
OCF growth 3Y1.61%
OCF growth 5Y11.29%