Reviewing Orkla Asa (OTCMKTS:ORKLY) & Federal Signal (NYSE:FSS)

Federal Signal (NYSE:FSS) and Orkla Asa (OTCMKTS:ORKLY) are both multi-sector conglomerates companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.

Institutional and Insider Ownership

92.7% of Federal Signal shares are held by institutional investors. 3.3% of Federal Signal shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Federal Signal	11.47%	19.50%	12.93%
Orkla Asa	15.49%	13.29%	7.46%

Analyst Ratings

This is a summary of recent recommendations for Federal Signal and Orkla Asa, as reported by MarketBeat.com.

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

Federal Signal presently has a consensus target price of $123.00, suggesting a potential upside of 5.25%. Given Federal Signal’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Federal Signal is more favorable than Orkla Asa.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Federal Signal	$1.86 billion	3.82	$216.30 million	$3.83	30.51
Orkla Asa	$6.57 billion	N/A	$546.95 million	$1.04	12.03

Orkla Asa has higher revenue and earnings than Federal Signal. Orkla Asa is trading at a lower price-to-earnings ratio than Federal Signal, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Federal Signal has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500. Comparatively, Orkla Asa has a beta of 0.43, indicating that its stock price is 57% less volatile than the S&P 500.

Dividends

Federal Signal pays an annual dividend of $0.56 per share and has a dividend yield of 0.5%. Orkla Asa pays an annual dividend of $0.27 per share and has a dividend yield of 2.2%. Federal Signal pays out 14.6% of its earnings in the form of a dividend. Orkla Asa pays out 26.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Federal Signal has increased its dividend for 3 consecutive years.

Summary

Federal Signal beats Orkla Asa on 12 of the 16 factors compared between the two stocks.

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.

About Orkla Asa

Orkla ASA engages in branded consumer goods, and industrial and financial investment businesses. The company offers branded products, including frozen pizza, ketchup, soups, sauces, bread toppings, and ready-to-eat meals through grocery channels, as well as food service, convenience stores, and petrol stations. It also provides confectionery, biscuit, and snack products; and spices, masalas, and various food products based on dried mixes. In addition, the company offers personal care, hygiene, laundry detergent, and cleaning products; dietary supplement, oral care, sport nutrition, and weight control products; wound care products and first aid equipment; painting tools and accessories; basic and wool garments; and professional cleaning products. It operates Gymgrossisten, Proteinfabrikken, Bodystore, and Fitnesstukku e-commerce portals for health and sports nutrition products; and restaurants. Additionally, the company supplies margarine and butter blends, bread and cake improvers and mixes, yeast, marzipan, and ice cream ingredients; produces and supplies hydro power to the Nordic power market; and develops and sells real estate properties. It offers its food products under the Grandiosa, TORO, Stabburet, Felix, Paulúns, Fun Light, Abba, Beauvais, Kalles, Den Gamle Fabrik, Hamé, and Vitana brands; confectionery and snacks under the KiMs, Nidar, Stratos, Sætre, Göteborgs Kex, OLW, Panda, Laima, Selga, Taffel, Kalev, and Nói Síríus brands; home and personal care products under Zalo, OMO, Blenda, Jif, Define, Solidox, Dr Greve, Lano, and Bliw; health produtcs under Möller's, Jordan, Vitalab, OSL, Cederroth First Aid, Salvequick, Livol, Nutrilett, Maxim, Collett, Solidox and CuraMed brands; and food ingredients under the Odense, Mors Hjemmebakte, KronJäst, Bakkedal, and NATURLI brands. It has operations in Norway, Sweden, Denmark, Finland, Iceland, the Baltics, rest of Europe, and internationally. The company was founded in 1918 and is headquartered in Oslo, Norway.