Here's Why Investors Should Retain Flowserve Stock in Portfolio

Core Insights - Flowserve Corporation (FLS) is experiencing strong growth in its Pump Division and Flow Control Division, driven by robust aftermarket demand across North America, Europe, the Middle East, and Latin America, with revenues in the Pump Division increasing by 1.8% year over year in Q1 2025 [1] - The Flow Control Division saw a significant increase in bookings, up 21.2% year over year in Q1, with revenues rising by 13.6% in the same period, supported by growth in general industries and energy markets [2] - Flowserve's balanced capital allocation strategy includes acquisitions, dividends, and share repurchases, with the recent acquisition of MOGAS Industries contributing positively to sales growth by 3.3% in Q1 2025 [3] Financial Performance - In Q1 2025, Flowserve allocated $27.6 million for dividends and $21.1 million for share buybacks, while in 2024, it paid out $110.4 million in dividends and repurchased shares worth $20.1 million [4] - The company increased its quarterly dividend by approximately 5% to 21 cents per share in Q1 2025 [4] - Despite revenue growth, Flowserve faced rising operating costs, with the cost of sales increasing by 3.6% year over year to $775.2 million, representing 67.7% of net sales [5] Debt and Market Position - Flowserve ended Q1 2025 with a long-term debt of $1.45 billion, with an interest expense of $19.2 million in the same quarter, indicating high leverage concerns [10] - The company's stock performance has been under pressure, with shares losing 3% over the past year compared to a 4% growth in the industry [8]