FLS gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 132 industry peers in the Machinery industry. FLS has an excellent profitability rating, but there are some minor concerns on its financial health. FLS is not valued too expensively and it also shows a decent growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

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

FLS's Return On Assets of 7.77% is fine compared to the rest of the industry. FLS outperforms 73.48% of its industry peers.
FLS's Return On Equity of 20.00% is amongst the best of the industry. FLS outperforms 87.88% of its industry peers.
The Return On Invested Capital of FLS (11.00%) is better than 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 has a Profit Margin of 9.66%. This is in the better half of the industry: FLS outperforms 71.21% of its industry peers.
In the last couple of years the Profit Margin of FLS has remained more or less at the same level.
FLS has a Operating Margin of 11.96%. This is in the better half of the industry: FLS outperforms 60.61% of its industry peers.
In the last couple of years the Operating Margin of FLS has remained more or less at the same level.
FLS has a Gross Margin (33.72%) which is comparable to the rest of the industry.
FLS's Gross Margin has been stable in the last couple of years.

		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%

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ROA

ROE

ROIC

Operating and Profit Margin

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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.
Compared to 1 year ago, FLS has about the same amount of shares outstanding.
Compared to 5 years ago, FLS has more shares outstanding
The debt/assets ratio for FLS is higher compared to a year ago.

2.2 Solvency

FLS has an Altman-Z score of 4.17. This indicates that FLS is financially healthy and has little risk of bankruptcy at the moment.
FLS has a better Altman-Z score (4.17) than 65.91% 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.
FLS's Debt to FCF ratio of 2.36 is fine compared to the rest of the industry. FLS outperforms 73.48% of its industry peers.
A Debt/Equity ratio of 0.63 indicates that FLS is somewhat dependend on debt financing.
The Debt to Equity ratio of FLS (0.63) is worse than 61.36% of its industry peers.
Even though the debt/equity ratio score it not favorable for FLS, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.

		Industry Rank	Sector Rank
Debt/Equity	0.63
Debt/FCF	2.36
Altman-Z	4.17

ROIC/WACC1.15

WACC9.53%

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.
Looking at the Current ratio, with a value of 2.10, FLS is in line with its industry, outperforming 53.03% of the companies in the same industry.
FLS has a Quick Ratio of 1.54. This is a normal value and indicates that FLS is financially healthy and should not expect problems in meeting 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

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WACC

Debt/Equity

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Altman-Z score

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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.
The Revenue has been growing slightly by 3.19% in the past year.
FLS shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.96% yearly.

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.
The Revenue is expected to grow by 3.96% on average over the next years.

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

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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 24.07, FLS is valued on the expensive side.
62.12% of the companies in the same industry are more expensive than FLS, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of FLS to the average of the S&P500 Index (27.25), we can say FLS is valued inline with the index average.
FLS is valuated rather expensively with a Price/Forward Earnings ratio of 19.33.
Based on the Price/Forward Earnings ratio, FLS is valued a bit cheaper than 65.15% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 25.98. FLS is valued slightly cheaper when compared to this.

		Industry Rank	Sector Rank
PE	24.07
Fwd PE	19.33

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of FLS is on the same level as its industry peers.
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	15.71
EV/EBITDA	16.08

4.3 Compensation for Growth

FLS's 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)0.82

PEG (5Y)5.76

EPS Next 2Y22.04%

EPS Next 3Y18.18%

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5. Dividend

5.1 Amount

FLS has a Yearly Dividend Yield of 1.07%. Purely for dividend investing, there may be better candidates out there.
FLS's Dividend Yield is a higher than the industry average which is at 1.01.
With a Dividend Yield of 1.07, FLS pays less dividend than the S&P500 average, which is at 1.82.

		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.
The dividend of FLS is growing, but earnings are growing more, so the dividend growth is sustainable.

DP24.35%

EPS Next 2Y22.04%

EPS Next 3Y18.18%

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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 24.07 and the Price/Book (PB) ratio is 4.37.

Can you provide the financial health for FLS stock?

The financial health rating of FLOWSERVE CORP (FLS) is 6 / 10.