Core Insights - Ferguson Enterprises Inc. (FERG) and Flowserve Corporation (FLS) are key players in the manufacturing - general industrial industry, competing in the industrial pump and valve markets [1][2] Ferguson Enterprises Inc. (FERG) - FERG is experiencing strong momentum in its U.S. business, with non-residential market revenues increasing by 6.8% year over year in fiscal 2025, contributing to half of its U.S. business [3][4] - The company's commercial and civil infrastructure markets saw revenue increases of 7% and 9%, respectively, although residential market softness partially offset these gains [4] - FERG's Canadian business also benefited from non-residential market strength, with revenues rising 3.7% year over year [5] - The company is focused on acquisitions to expand its customer base and product lines, completing four acquisitions in Q4 of fiscal 2025, which contributed approximately 1% and 4.9% to U.S. and Canada sales, respectively [6] - FERG's long-term debt stood at $3.75 billion at the end of fiscal 2025, with interest expenses increasing by 6.1% year over year to $190 million [7] - Rising costs are a concern, with the cost of goods sold increasing by 3.6% to $21.3 billion and selling, general, and administrative expenses rising by 5.6% to $6.4 billion in fiscal 2025 [8] Flowserve Corporation (FLS) - FLS is experiencing strong growth in its Pump and Flow Control Division segments, driven by robust aftermarket demand across various regions [9][11] - The Pump Division's revenues increased by 1.3% year over year in the first half of 2025, while the Flow Control Division saw a revenue surge of 10.1% [11] - FLS expects total revenues to grow by 5-6% in 2025, supported by its Diversify, Decarbonize, and Digitize (3D) strategy, which aims to expand its market presence and capitalize on investments in clean energy [12] - The MOGAS acquisition in October 2024 enhanced FLS's valve and automation portfolio, contributing positively to sales growth by 2.6% in Q2 2025 [13] - However, rising costs of sales and expenses are a concern, with cost of sales increasing by 1.1% to $1.56 billion and selling, general, and administrative expenses rising by 9% in the first half of 2025 [14] Financial Estimates and Valuation - The Zacks Consensus Estimate for FERG's fiscal 2026 sales is $32.1 billion, indicating a year-over-year growth of 4.4%, with earnings estimated at $10.59 per share, a 6.5% increase [15] - For FLS, the consensus estimate for 2025 sales is approximately $4.81 billion, reflecting a growth of 5.6%, with earnings projected at $3.37 per share, a significant increase of 28.1% [18] - FLS is trading at a forward price-to-earnings ratio of 13.97X, below its three-year median of 17.06X, while FERG's ratio is higher at 22.63X, above its median of 18.05X [21] Conclusion - FERG's strengths in the U.S. and Canada are tempered by weaknesses in the residential market and rising expenses, suggesting a cautious approach for investors [23] - In contrast, FLS's strong momentum and attractive valuation position it favorably for growth, despite potential margin pressures from rising operating expenses [24] - Overall, FLS appears to have an edge over FERG based on long-term prospects, revenue growth potential, and valuation metrics [25]

Core Insights - Flowserve Corporation (FLS) is positioned for growth due to strong performance across its segments, strategic acquisitions, and shareholder-friendly initiatives [1][4][9] - The company has achieved a Zacks Rank 1 (Strong Buy) and has outperformed the industry with a 21.1% gain over the past year compared to the industry's 10% growth [1][4] Business Strength - Flowserve is experiencing robust momentum in its Pump Division and Flow Control Division, driven by strong aftermarket demand in North America, the Middle East, and Africa [4] - The Flow Control Division's bookings increased by 5.9% year over year, supported by rising customer orders in energy and general industries [5] End Market Strength - The company's Diversify, Decarbonize, and Digitize (3D) strategy is enhancing booking levels, with ongoing investments in stormwater infrastructure and drainage projects contributing positively [6] - The chemical end market is benefiting from increased investments in petrochemical projects in the Middle East and Asia, while the power generation market sees solid bookings due to global investments in nuclear energy and combined-cycle power generation [6] - Flowserve reported $1.1 billion in bookings for Q2 2025, marking the 14th consecutive quarter with bookings exceeding $1 billion [6] Expansion Efforts - Flowserve has strengthened its business through acquisitions, notably acquiring MOGAS Industries in October 2024, which enhanced its valve and automation product portfolio [7] - The MOGAS acquisition contributed positively to sales growth, adding 2.6% to the Flow Control Division's performance in Q2 2025 [7][8] Rewards to Shareholders - The company has been rewarding shareholders through dividends and share buybacks, distributing $55.2 million in dividends and repurchasing $52.8 million in shares in the first half of 2025 [9]