Back to top

Analyst Blog

Recently, Flowserve Corporation (FLS - Analyst Report) decided to record June 21, 2013 as the distribution date for its already-announced stock split. The 3-for-1 split will be made in the form of a stock dividend. The record date for the split, however, remains unchanged at June 7.

Concurrent with the announcement, Flowserve rescheduled the previously-announced record date for its quarterly cash dividend to July 2, the payable date remaining unchanged at July 12. The readjusted dividend will now be 14 cents per share, one-third of its previously announced level of 42 cents a share.

Usually a stock split is done by companies that have seen their share price increase to levels that are either too high or are beyond the price levels of similar companies in their sector. The primary motive is to make shares seem more affordable to small investors even though the underlying value of the company has not changed. Flowserve fits well in both these scenarios. Flowserve stocks have risen almost 68% during the last one year. And the stock is currently trading at its all-time high levels.

Flowserve is currently trading at $168.13, much above its peers like Graco Inc. (GGG - Snapshot Report), which is currently trading at $ 64.92; Sun Hydraulics Corp. (SNHY - Snapshot Report), trading at $33.20; and Altra Holdings, Inc. (AIMC - Snapshot Report), trading at $28.21 as of closing on June 3, 2013. The stock split will provide greater marketability and liquidity to Flowserve in the market.

However, the split is likely to initially dilute the share prices as adjusted price per share falls. But if the shares appear to be cheaper, they might also experience a demand pull price increase. With the current price to book value ratio of 4.44, this growth is expected to continue in the future.

Flowserve presently has a Zacks Rank #3 (Hold).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.00 +3.09%
SANCHEZ ENE… SN 34.18 +2.67%
THE PANTRY… PTRY 21.02 +2.09%
INTEL CP INTC 35.15 +1.88%
CLAYTON WIL… CWEI 117.30 +1.78%