Federal Signal (FSS) and Its Rivals Head-To-Head Review

Federal Signal (NYSE:FSS) is one of 436 public companies in the “Machinery” industry, but how does it contrast to its competitors? We will compare Federal Signal to related companies based on the strength of its analyst recommendations, institutional ownership, risk, profitability, earnings, dividends and valuation.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Federal Signal and its competitors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Federal Signal	0	2	3	1	2.83
Federal Signal Competitors	4180	14647	18129	799	2.41

Federal Signal currently has a consensus price target of $140.50, suggesting a potential upside of 21.18%. As a group, “Machinery” companies have a potential upside of 31.24%. Given Federal Signal’s competitors higher possible upside, analysts plainly believe Federal Signal has less favorable growth aspects than its competitors.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Federal Signal	N/A	N/A	N/A
Federal Signal Competitors	-2,801.46%	-32.80%	-2.37%

Institutional and Insider Ownership

92.7% of Federal Signal shares are held by institutional investors. Comparatively, 51.7% of shares of all “Machinery” companies are held by institutional investors. 3.3% of Federal Signal shares are held by company insiders. Comparatively, 14.3% of shares of all “Machinery” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Federal Signal and its competitors revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Federal Signal	$2.45 billion	N/A	24.99
Federal Signal Competitors	$3.53 billion	$150.45 million	3.53

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

Volatility & Risk

Federal Signal has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, Federal Signal’s competitors have a beta of 1.78, meaning that their average stock price is 78% more volatile than the S&P 500.

Dividends

Federal Signal pays an annual dividend of $0.60 per share and has a dividend yield of 0.5%. Federal Signal pays out 12.9% of its earnings in the form of a dividend. As a group, “Machinery” companies pay a dividend yield of 3.0% and pay out 24.6% of their earnings in the form of a dividend. Federal Signal has raised its dividend for 3 consecutive years.

Summary

Federal Signal beats its competitors on 9 of the 14 factors compared.

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.