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Reasons to Add Flowserve (FLS) Stock to Your Portfolio Now
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Flowserve Corporation (FLS - Free Report) is well-poised for growth courtesy of strength across its businesses, focus on operational excellence and a healthy liquidity position. The company remains committed to investing in growth opportunities and solidifying its long-term market position.
Image Source: Zacks Investment Research
The company has a market capitalization of $6.3 billion. Over the past six months, its shares have gained 14.5% compared with the industry’s 1.4% growth. FLS currently carries a Zacks Rank #2 (Buy).
Let’s delve into the factors that have been aiding the firm for a while now.
Business Strength: The company is witnessing several positive trends in its key end markets that hold promise for its long-term growth. These trends include high refining utilization rates in the oil & gas market, strength in the chemical market, growing investment in digitization and decarbonization projects, and enhanced spending in the industrial wastewater market. Record levels of booking, driven by strong MRO and aftermarket activity, are driving Flowserve's growth.
Flowserve’s first-quarter 2024 bookings of $1.04 billion marked the ninth consecutive quarter of more than $1 billion bookings. Exiting the first quarter, its backlog level totaled $2.6 billion. Supported by strength across its businesses, the company expects revenues to increase in the band of 4-6% year over year in 2024.
Focus on Operational Excellence: Solid operational execution, pricing actions and improving supply chains are supporting the company’s margins. For instance, in the first quarter, Flowserve’s gross margin increased 90 basis points year over year aided by effective pricing actions and higher sales volume.
Shareholder-Friendly Moves: Management remains focused on rewarding its shareholders through dividend payouts. In the first three months of 2024, the company used $27.7 million for distributing dividends. Also, it paid dividends of $105 million in 2023. In the first quarter, FLS hiked its quarterly dividend by 5% to 21 cents per share.
Strong Liquidity Position: In the first quarter, the company generated net cash of $62.3 million from operating activities, up from $26.6 million in the year-ago period. Exiting the quarter, its cash and cash equivalents totaled $532 million, much higher than its short-term debt of $66.4 million.
It has a trailing four-quarter average earnings surprise of 122.5%. The Zacks Consensus Estimate for LXFR’s 2024 earnings has improved 13.5% in the past 60 days.
Ingersoll Rand plc (IR - Free Report) currently carries a Zacks Rank of 2. IR delivered a trailing four-quarter average earnings surprise of 12.9%.
In the past 60 days, the Zacks Consensus Estimate for Ingersoll Rand’s 2024 earnings has increased 2.8%.
Crane Company (CR - Free Report) currently carries a Zacks Rank of 2 and has a trailing four-quarter earnings surprise of 15.2%, on average.
The Zacks Consensus Estimate for CR’s 2024 earnings has inched up 0.8% in the past 60 days.
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Reasons to Add Flowserve (FLS) Stock to Your Portfolio Now
Flowserve Corporation (FLS - Free Report) is well-poised for growth courtesy of strength across its businesses, focus on operational excellence and a healthy liquidity position. The company remains committed to investing in growth opportunities and solidifying its long-term market position.
Image Source: Zacks Investment Research
The company has a market capitalization of $6.3 billion. Over the past six months, its shares have gained 14.5% compared with the industry’s 1.4% growth. FLS currently carries a Zacks Rank #2 (Buy).
Let’s delve into the factors that have been aiding the firm for a while now.
Business Strength: The company is witnessing several positive trends in its key end markets that hold promise for its long-term growth. These trends include high refining utilization rates in the oil & gas market, strength in the chemical market, growing investment in digitization and decarbonization projects, and enhanced spending in the industrial wastewater market. Record levels of booking, driven by strong MRO and aftermarket activity, are driving Flowserve's growth.
Flowserve’s first-quarter 2024 bookings of $1.04 billion marked the ninth consecutive quarter of more than $1 billion bookings. Exiting the first quarter, its backlog level totaled $2.6 billion. Supported by strength across its businesses, the company expects revenues to increase in the band of 4-6% year over year in 2024.
Focus on Operational Excellence: Solid operational execution, pricing actions and improving supply chains are supporting the company’s margins. For instance, in the first quarter, Flowserve’s gross margin increased 90 basis points year over year aided by effective pricing actions and higher sales volume.
Shareholder-Friendly Moves: Management remains focused on rewarding its shareholders through dividend payouts. In the first three months of 2024, the company used $27.7 million for distributing dividends. Also, it paid dividends of $105 million in 2023. In the first quarter, FLS hiked its quarterly dividend by 5% to 21 cents per share.
Strong Liquidity Position: In the first quarter, the company generated net cash of $62.3 million from operating activities, up from $26.6 million in the year-ago period. Exiting the quarter, its cash and cash equivalents totaled $532 million, much higher than its short-term debt of $66.4 million.
Other Stocks to Consider
Luxfer Holdings plc (LXFR - Free Report) presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
It has a trailing four-quarter average earnings surprise of 122.5%. The Zacks Consensus Estimate for LXFR’s 2024 earnings has improved 13.5% in the past 60 days.
Ingersoll Rand plc (IR - Free Report) currently carries a Zacks Rank of 2. IR delivered a trailing four-quarter average earnings surprise of 12.9%.
In the past 60 days, the Zacks Consensus Estimate for Ingersoll Rand’s 2024 earnings has increased 2.8%.
Crane Company (CR - Free Report) currently carries a Zacks Rank of 2 and has a trailing four-quarter earnings surprise of 15.2%, on average.
The Zacks Consensus Estimate for CR’s 2024 earnings has inched up 0.8% in the past 60 days.