Fluor (NYSE: FLR) is a large engineering and construction company. It has made material improvements to its business processes over the last few years. And it has made some astute investments in other companies. But you need to understand a few things before you buy this stock.
It is important to give credit where credit is due. In recent years, Fluor’s contracts often included a fixed price. If Fluor came in under budget, it got to keep any extra cash from the deal. However, if Fluor came in over budget, it had to eat the extra costs. The inherent risk of that approach isn’t great, and too many projects going over budget became a major problem for the company. It changed gears.
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Today, the company is focused on reimbursable contracts. This makes the business far more consistent, since cost overruns are no longer a problem. Fluor’s $25.5 billion backlog is 81% reimbursable. That provides a stable floor for the company’s top line in the near term. The big story, however, is that Fluor is a better business than it was before.
While Fluor’s business has definitely been changed for the better, the construction business hasn’t changed much. That’s important to keep in mind because construction tends to be cyclical. Huge capital spending projects are easy to justify when the economy is strong, but they are often delayed or canceled during a recession. The changes Fluor has made to its business can’t change the very nature of the construction industry, so it remains an economically sensitive stock.
Some investors may see Fluor as having a hidden gem inside of it because it was an early investor in nuclear power start-up NuScale Power (NYSE: SMR). It was, indeed, an astute investment, and Fluor is currently monetizing its stake in the company. In late 2025, NuScale stock sales generated $605 million. So far in 2026, Fluor has raised $1.35 billion from NuScale stock sales. And it still has another 40 million shares to sell, which it should get done sometime in 2026.
Since it’s set to generate well over $2 billion in proceeds from its NuScale stock sales, this is a huge win for Fluor. The cash will give the company financial flexibility. However, the NuScale Power exit is a one-time event. It is exciting, but it probably won’t dramatically alter the future for this cyclical construction company. After all, nothing dramatic has changed about the company’s core business.
