Comparing Federal Signal (NYSE:FSS) & Barloworld (OTCMKTS:BRRAY)

Barloworld (OTCMKTS:BRRAY) and Federal Signal (NYSE:FSS) are both mid-cap multi-sector conglomerates companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, dividends and profitability.

Institutional & Insider Ownership

92.7% of Federal Signal shares are owned by institutional investors. 3.3% of Federal Signal shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Barloworld pays an annual dividend of $0.08 per share and has a dividend yield of 0.5%. Federal Signal pays an annual dividend of $0.56 per share and has a dividend yield of 0.5%. Federal Signal pays out 14.6% of its earnings in the form of a dividend. Federal Signal has increased its dividend for 3 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Barloworld and Federal Signal, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Barloworld	0	0	0	0	0.00
Federal Signal	0	4	2	0	2.33

Federal Signal has a consensus price target of $123.00, suggesting a potential upside of 8.43%. Given Federal Signal’s stronger consensus rating and higher probable upside, analysts plainly believe Federal Signal is more favorable than Barloworld.

Valuation and Earnings

This table compares Barloworld and Federal Signal”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Barloworld	$2.09 billion	1.42	$79.96 million	N/A	N/A
Federal Signal	$1.86 billion	3.71	$216.30 million	$3.83	29.62

Federal Signal has lower revenue, but higher earnings than Barloworld.

Profitability

This table compares Barloworld and Federal Signal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Barloworld	N/A	N/A	N/A
Federal Signal	11.47%	19.50%	12.93%

Volatility and Risk

Barloworld has a beta of -0.29, indicating that its share price is 129% less volatile than the S&P 500. Comparatively, Federal Signal has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500.

Summary

Federal Signal beats Barloworld on 12 of the 15 factors compared between the two stocks.

About Barloworld

Barloworld Limited operates as an industrial processing, distribution, and services company in Southern Africa, Australia, Russia, and Mongolia. The company operates through Equipment Southern Africa, Automotive, Ingrain, Equipment Eurasia, and Other segments. The company offers industrial equipment and services comprising of earthmoving equipment, industrial services, and power systems that enable various mining, construction, and power solutions. It also manufactures various products, which includes food, beverages, paper, pharmaceuticals, building material and adhesives, and others. In addition, the company offers starch, glucose, and other products; and salvage management and disposal services. It serves mining, construction, energy, and transportation sectors. The company was founded in 1902 and is based in Sandton, South Africa.

About Federal Signal

Federal Signal Corp. engages in the design and manufacture of products and integrated solutions for municipal, governmental, industrial, and commercial customers. It operates through the Environmental Solutions Group and Safety and Security Systems Group segments. The Environment Solutions Group segment is involved in the manufacture and supply of street sweeper vehicles, sewer cleaners, vacuum loader trucks, hydro-excavation trucks, and water blasting equipment. The Safety and Security Systems Group segment offers comprehensive systems and products that law enforcement, fire rescue, emergency medical services, campuses, military facilities, and industrial sites use to protect people and property. The company was founded in 1901 and is headquartered in Oak Brook, IL.