Head to Head Contrast: Flowserve (FLS) vs. The Competition

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

Institutional and Insider Ownership

93.9% of Flowserve shares are held by institutional investors. Comparatively, 51.7% of shares of all “Machinery” companies are held by institutional investors. 0.7% of Flowserve shares are held by company insiders. Comparatively, 14.2% of shares of all “Machinery” companies are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Flowserve pays an annual dividend of $0.88 per share and has a dividend yield of 1.1%. Flowserve pays out 44.2% of its earnings in the form of a dividend. As a group, “Machinery” companies pay a dividend yield of 2.8% and pay out 24.6% of their earnings in the form of a dividend. Flowserve has increased its dividend for 1 consecutive years. Flowserve lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Analyst Recommendations

This is a summary of current recommendations and price targets for Flowserve and its competitors, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Flowserve	0	4	6	0	2.60
Flowserve Competitors	4196	14698	18193	805	2.41

Flowserve currently has a consensus price target of $86.44, indicating a potential upside of 9.77%. As a group, “Machinery” companies have a potential upside of 34.37%. Given Flowserve’s competitors higher probable upside, analysts clearly believe Flowserve has less favorable growth aspects than its competitors.

Earnings and Valuation

This table compares Flowserve and its competitors gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Flowserve	$4.70 billion	$346.25 million	39.57
Flowserve Competitors	$4.66 billion	$364.05 million	3.50

Flowserve has higher revenue, but lower earnings than its competitors. Flowserve is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Volatility & Risk

Flowserve has a beta of 1.28, indicating that its share price is 28% more volatile than the S&P 500. Comparatively, Flowserve’s competitors have a beta of 5.11, indicating that their average share price is 411% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Flowserve	5.42%	22.14%	8.49%
Flowserve Competitors	-1,044.42%	-14.99%	0.57%

Summary

Flowserve beats its competitors 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.