Federal Signal (FSS) & The Competition Financial Contrast

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

Insider and Institutional Ownership

92.7% of Federal Signal shares are owned by institutional investors. Comparatively, 51.7% of shares of all “Machinery” companies are owned by institutional investors. 3.3% of Federal Signal shares are owned by insiders. Comparatively, 14.3% of shares of all “Machinery” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

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

	Gross Revenue	Net Income	Price/Earnings Ratio
Federal Signal	$2.18 billion	$246.60 million	23.31
Federal Signal Competitors	$4.65 billion	$364.05 million	3.54

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

Volatility and Risk

Federal Signal has a beta of 1.22, suggesting that its share price is 22% more volatile than the S&P 500. Comparatively, Federal Signal’s peers have a beta of 5.11, suggesting that their average share price is 411% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Federal Signal and its peers, as reported 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	4191	14681	18178	803	2.41

Federal Signal presently has a consensus target price of $140.50, indicating a potential upside of 25.07%. As a group, “Machinery” companies have a potential upside of 31.60%. Given Federal Signal’s peers higher possible upside, analysts plainly believe Federal Signal has less favorable growth aspects than its peers.

Dividends

Federal Signal pays an annual dividend of $0.60 per share and has a dividend yield of 0.5%. Federal Signal pays out 12.4% of its earnings in the form of a dividend. As a group, “Machinery” companies pay a dividend yield of 2.8% and pay out 24.6% of their earnings in the form of a dividend. Federal Signal has raised its dividend for 3 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Federal Signal	11.65%	21.31%	12.91%
Federal Signal Competitors	-1,044.46%	-15.08%	0.55%

Summary

Federal Signal beats its peers on 9 of the 15 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.