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

Risk and Volatility

Federal Signal has a beta of 1.3, meaning that its stock price is 30% more volatile than the S&P 500. Comparatively, Federal Signal’s competitors have a beta of 1.43, meaning that their average stock price is 43% more volatile than the S&P 500.

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 endowments, large money managers and hedge funds believe a company is poised for long-term growth.

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 5.30% 11.39% 5.64%
Federal Signal Competitors 4.06% 13.41% 3.96%

Earnings and Valuation

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

Gross Revenue Net Income Price/Earnings Ratio
Federal Signal $707.90 million $43.80 million 27.95
Federal Signal Competitors $6.06 billion $48.37 million 122.31

Federal Signal’s competitors have higher revenue and earnings than Federal Signal. Federal Signal is trading at a lower price-to-earnings ratio than its competitors, 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 1.4%. 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 1.3% and pay out 35.9% of their earnings in the form of a dividend. Federal Signal has increased its dividend for 2 consecutive years.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Federal Signal 0 0 2 0 3.00
Federal Signal Competitors 171 886 965 17 2.41

Federal Signal presently has a consensus target price of $20.00, suggesting a potential downside of 1.96%. As a group, “Heavy Machinery & Vehicles” companies have a potential upside of 7.50%. Given Federal Signal’s competitors higher possible upside, analysts plainly believe Federal Signal has less favorable growth aspects than its competitors.

Summary

Federal Signal competitors 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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