Fluor (FLR 3.41%) is a large engineering and construction company. Don't let the company's investment in NuScale Power (SMR 2.50%) pull your eye off the ball. Yes, selling the NuScale stake could be a big event. But it doesn't actually change Fluor's core story. Here's what you need to know before you buy Fluor stock.
NuScale Power is an exciting side story
Fluor was an early investor in NuScale Power, a start-up attempting to build small-scale modular nuclear reactors (SMRs). Fluor basically hopes to be a key partner on construction projects that use NuScale's SMRs. For example, the two companies are working together in Romania, where a utility is considering building a power plant with six NuScale SMRs.
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That said, Fluor is currently looking to monetize its NuScale Power investment. It sold some of its NuScale stock in late 2025, generating net proceeds of $605 million. It plans to sell the rest of its stake in 2026. That's great, but this is, basically, a one-time event and doesn't change anything about Fluor's core business other than strengthening its balance sheet.
Fluor is cyclical by nature
The knock against Fluor in recent years was its use of fixed-price contracts, which left the company on the hook for price overruns on the construction projects it was overseeing. Management is working to fix that problem, with 82% of its backlog using reimbursable contracts. A full 99% of the $3.4 billion in contracts it signed in the third quarter of 2025 were reimbursable.
NYSE: FLR
Key Data Points
That's good news and will help make Fluor a more consistent business. There's just one problem: The construction industry tends to be highly cyclical by nature. That makes sense, since construction projects are huge capital investments. When the economy is doing well, companies and governments have no problem spending money. However, when there's a recession and money is tight, projects often get delayed or even canceled. Thus, economic downturns can be hard on construction companies like Fluor, and that's not an industry dynamic that is likely to change anytime soon.
Know what you are buying into with Fluor
Fluor is good at what it does, but that doesn't mean it will be a good long-term investment for most investors. Unless you can handle large swings in the company's business that are likely to coincide with large swings in the economy and, perhaps, the stock market, you should probably look for another investment.
