3 Reasons To Consider Fluor

Summary

• Fluor Corporation has delivered commendable YTD returns of ~28% outperforming other mid-caps by 2x and industrial stocks by 1.6x.
• FLR's forward EV/EBITDA multiple is not cheap, but allowances could be made due to the sturdy operating leverage, while the FCF yield looks very compelling.
• A robust balance sheet and high cash levels support the likelihood of a pickup in buybacks, while the dividend too could be reinstated after 4 years.
• The risk-reward on the standalone and relative strength charts look favorable.
• FLR doesn't have the most pristine track record when it comes to guidance, and the energy solutions division is currently suffering from a lack of conversion from FEED work to EPC wins.

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Introduction

The stock of Fluor Corporation (NYSE:FLR), one of the most prominent EPC (Engineering, Procurement, and Construction) players in the world with exposure to a wide range of attractive end-markets (including data-center, nuclear, metals & mining, life sciences, Federal, etc.), has proven to be a

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.