) 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
Flowserve is currently trading at $168.13, much above its
), which is currently trading at $ 64.92;
Sun Hydraulics Corp.
), trading at $33.20; and
Altra Holdings, Inc.
), 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).
ALTRA HOLDINGS (AIMC): Free Stock Analysis
FLOWSERVE CORP (FLS): Free Stock Analysis
GRACO INC (GGG): Free Stock Analysis Report
SUN HYDRAULICS (SNHY): Free Stock Analysis
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