Critical Analysis: Taylor Devices (NASDAQ:TAYD) versus Flowserve (NYSE:FLS)

Taylor Devices (NASDAQ:TAYD) and Flowserve (NYSE:FLS) are both industrials companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, valuation, dividends, risk, profitability and institutional ownership.

Institutional & Insider Ownership

17.6% of Taylor Devices shares are held by institutional investors. Comparatively, 93.9% of Flowserve shares are held by institutional investors. 8.9% of Taylor Devices shares are held by company insiders. Comparatively, 0.8% of Flowserve shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

Taylor Devices has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500. Comparatively, Flowserve has a beta of 1.29, suggesting that its share price is 29% more volatile than the S&P 500.

Profitability

This table compares Taylor Devices and Flowserve’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Taylor Devices	20.33%	16.40%	14.13%
Flowserve	6.28%	18.25%	7.12%

Analyst Recommendations

This is a breakdown of recent ratings for Taylor Devices and Flowserve, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Taylor Devices	0	0	0	0	0.00
Flowserve	0	1	8	1	3.00

Flowserve has a consensus target price of $65.78, indicating a potential upside of 22.56%. Given Flowserve’s stronger consensus rating and higher possible upside, analysts clearly believe Flowserve is more favorable than Taylor Devices.

Valuation & Earnings

This table compares Taylor Devices and Flowserve”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Taylor Devices	$46.29 million	3.31	$9.41 million	$3.00	16.24
Flowserve	$4.56 billion	1.54	$282.76 million	$2.21	24.28

Flowserve has higher revenue and earnings than Taylor Devices. Taylor Devices is trading at a lower price-to-earnings ratio than Flowserve, indicating that it is currently the more affordable of the two stocks.

Summary

Flowserve beats Taylor Devices on 10 of the 15 factors compared between the two stocks.

About Taylor Devices

Taylor Devices, Inc. engages in design, development, manufacture, and marketing of shock absorption, rate control, and energy storage devices for use in machinery, equipment, and structures in the United States, Asia, and internationally. Its products include seismic dampers that are designed to mitigate the effects of earthquakes on structures; Fluidicshoks, which are compact shock absorbers primarily used in defense, aerospace, and commercial industries; and crane and industrial buffers, which are larger versions of the Fluidicshoks for industrial application on cranes and crane trolleys, truck docks, ladle and ingot cars, ore trolleys, and train car stops. The company's products also comprise self-adjusting shock absorbers that include versions of Fluidicshoks, and crane and industrial buffers, which automatically adjust to various impact conditions and are designed for high cycle application primarily in the heavy industry; liquid die springs that are used as component parts of machinery and equipment used in the manufacture of tools and dies; vibration dampers, which are primarily used by aerospace and defense industries to control the response of electronics and optical systems subjected to air, ship, or spacecraft vibration; machined springs used in the aerospace applications; and custom actuators for special aerospace and defense applications. It markets its products through a network of sales representatives and distributors. The company was incorporated in 1955 and is headquartered in North Tonawanda, New York.

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.