Federal Signal (NYSE: FSS) is one of 15 publicly-traded companies in the “Heavy Machinery & Vehicles” industry, but how does it weigh in compared to its rivals? We will compare Federal Signal to related companies based on the strength of its profitability, dividends, risk, valuation, earnings, analyst recommendations and institutional ownership.

Institutional & Insider Ownership

84.1% of Federal Signal shares are owned by institutional investors. Comparatively, 82.2% of shares of all “Heavy Machinery & Vehicles” companies are owned by institutional investors. 4.2% of Federal Signal shares are owned by insiders. Comparatively, 8.9% of shares of all “Heavy Machinery & Vehicles” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Federal Signal and its rivals revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Federal Signal $707.90 million $43.80 million 28.75
Federal Signal Competitors $6.06 billion $48.37 million 113.46

Federal Signal’s rivals have higher revenue and earnings than Federal Signal. Federal Signal is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Dividends

Federal Signal pays an annual dividend of $0.28 per share and has a dividend yield of 1.3%. Federal Signal pays out 38.4% of its earnings in the form of a dividend. As a group, “Heavy Machinery & Vehicles” companies pay a dividend yield of 1.2% and pay out 33.7% of their earnings in the form of a dividend. Federal Signal has raised its dividend for 2 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings for Federal Signal and its rivals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Federal Signal 0 0 2 0 3.00
Federal Signal Competitors 171 885 963 17 2.41

Federal Signal currently has a consensus target price of $20.00, suggesting a potential downside of 4.72%. As a group, “Heavy Machinery & Vehicles” companies have a potential upside of 6.11%. Given Federal Signal’s rivals higher possible upside, analysts plainly believe Federal Signal has less favorable growth aspects than its rivals.

Profitability

This table compares Federal Signal and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Federal Signal 5.30% 11.39% 5.64%
Federal Signal Competitors 4.06% 13.41% 3.96%

Volatility and Risk

Federal Signal has a beta of 1.3, indicating that its share price is 30% more volatile than the S&P 500. Comparatively, Federal Signal’s rivals have a beta of 1.44, indicating that their average share price is 44% more volatile than the S&P 500.

Summary

Federal Signal rivals beat Federal Signal on 9 of the 15 factors compared.

About Federal Signal

Federal Signal Corporation designs, manufactures and supplies a suite of products and integrated solutions for municipal, governmental, industrial and commercial customers. The Company’s segments include the Environmental Solutions Group and the Safety and Security Systems Group. Its Environmental Solutions Group manufactures and supplies a range of street sweeper vehicles, sewer cleaner and vacuum loader trucks, hydro-excavation trucks and waterblasting equipment. The products are sold to both municipal and industrial customers under the Elgin, Vactor, Guzzler and Jetstream brand names. Safety and Security Systems is a manufacturer and supplier of systems and products that law enforcement, fire rescue, emergency medical services, campuses military facilities and industrial sites use to protect people and property. It offers systems for campus and community alerting, emergency vehicles, first responder interoperable communications and industrial communications, among others.

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