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

Analyst Recommendations

This is a breakdown of current ratings and price targets for Federal Signal and ASV, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Federal Signal 0 0 1 0 3.00
ASV 0 0 3 0 3.00

Federal Signal currently has a consensus price target of $20.00, suggesting a potential upside of 4.00%. ASV has a consensus price target of $10.92, suggesting a potential upside of 34.77%. Given ASV’s higher probable upside, analysts clearly believe ASV is more favorable than Federal Signal.

Dividends

Federal Signal pays an annual dividend of $0.28 per share and has a dividend yield of 1.5%. ASV does not pay a dividend. Federal Signal pays out 38.4% of its earnings in the form of a dividend.

Profitability

This table compares Federal Signal and ASV’s 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%
ASV 0.33% -0.78% -0.40%

Insider and Institutional Ownership

84.2% of Federal Signal shares are held by institutional investors. Comparatively, 41.2% of ASV shares are held by institutional investors. 4.2% of Federal Signal shares are held 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.

Earnings & Valuation

This table compares Federal Signal and ASV’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Federal Signal $707.90 million 1.63 $43.80 million $0.73 26.34
ASV $103.80 million 0.76 -$1.17 million N/A N/A

Federal Signal has higher revenue and earnings than ASV.

Summary

Federal Signal beats ASV on 9 of the 12 factors compared between the two stocks.

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.

About ASV

ASV Holdings, Inc. (ASV) is engaged in designing and manufacturing a range of compact track loader (CTL) and skid steer loader (SSL) equipment for construction, agricultural and forestry industries. The Company manufactures Posi-Track, rubber-tracked CTLs with multi-level suspension. CTLs are compact tracked vehicles with lift arms that functions in wet, muddy, snowy or harsh conditions and where there are slopes and grades, such as in a construction, agriculture or forestry environment. SSLs are wheeled vehicles with lift arms that can be outfitted with the same attachments as CTLs and can therefore be used in the same applications. The Company also serves as a private label original equipment manufacturer (OEM) for several manufacturers. It provides pre- and post-sale dealer support, after-sale technical support and replacement parts. The Company markets through a distribution network in North America, Australia and New Zealand under the ASV and Terex brands.

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