Financial Comparison: Colfax Corporation (CFX) vs. Flowserve Corporation (NYSE:FLS)

Colfax Corporation (NYSE: CFX) and Flowserve Corporation (NYSE:FLS) are both mid-cap industrial products companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.

Profitability

This table compares Colfax Corporation and Flowserve Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Colfax Corporation 4.35% 6.30% 3.10%
Flowserve Corporation 2.68% 13.20% 4.71%

Dividends

Flowserve Corporation pays an annual dividend of $0.76 per share and has a dividend yield of 2.0%. Colfax Corporation does not pay a dividend. Flowserve Corporation pays out 98.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Colfax Corporation has increased its dividend for 10 consecutive years.

Risk and Volatility

Colfax Corporation has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500. Comparatively, Flowserve Corporation has a beta of 1.46, indicating that its stock price is 46% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Colfax Corporation and Flowserve Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Colfax Corporation 0 4 7 0 2.64
Flowserve Corporation 1 7 6 0 2.36

Colfax Corporation presently has a consensus price target of $46.00, suggesting a potential upside of 14.97%. Flowserve Corporation has a consensus price target of $48.89, suggesting a potential upside of 25.90%. Given Flowserve Corporation’s higher possible upside, analysts clearly believe Flowserve Corporation is more favorable than Colfax Corporation.

Institutional and Insider Ownership

77.3% of Colfax Corporation shares are held by institutional investors. 10.6% of Colfax Corporation shares are held by company insiders. Comparatively, 1.0% of Flowserve Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Colfax Corporation and Flowserve Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Colfax Corporation $3.62 billion 1.36 $446.48 million $1.28 31.26
Flowserve Corporation $3.76 billion 1.35 $426.15 million $0.77 50.43

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

Summary

Colfax Corporation beats Flowserve Corporation on 11 of the 17 factors compared between the two stocks.

Colfax Corporation Company Profile

Colfax Corporation is an industrial manufacturing and engineering company. The Company provides gas and fluid handling and fabrication technology products and services to customers around the world. The Company’s segments include Gas and Fluid Handling, and Fabrication Technology. The Gas and Fluid Handling segment supplies a range of gas and fluid handling products, including heavy-duty centrifugal and axial fans, rotary heat exchangers, gas compressors, pumps and certain related products, as well as aftermarket and lubrication-related services, which serves customers in the power generation, oil, gas and petrochemical, mining, marine (including defense) and general industrial and other end markets. The Fabrication Technology segment supplies welding equipment and consumables, cutting equipment and consumables, and automated welding and cutting systems. It formulates, develops, manufactures and supplies consumable products and equipment.

Flowserve Corporation Company Profile

Flowserve Corporation is a manufacturer and aftermarket service provider of flow control systems. The Company’s segments include Engineered Product Division, Industrial Product Division and Flow Control Division. Its geographic segments include North America, Europe, Asia Pacific, Middle East and Africa, and Latin America. It develops and manufactures precision-engineered flow control equipment integral to the movement, control and protection of the flow of materials in its customer’s critical processes. Its product portfolio of pumps, valves, seals, automation and aftermarket services supports infrastructure industries, including oil and gas, chemical, power generation and water management. It offers aftermarket equipment services, such as installation, diagnostics, repair and retrofitting through manufacturing platform and network of Quick Response Centers. Its products include oil and gas, general industries, chemical, power generation and water management.

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