Federal Signal Corporation (NYSE: FSS) and Manitowoc Company, Inc. (The) (NYSE:MTW) 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 institutional ownership, earnings, dividends, profitabiliy, risk, valuation and analyst recommendations.

Dividends

Federal Signal Corporation pays an annual dividend of $0.28 per share and has a dividend yield of 1.5%. Manitowoc Company, Inc. (The) does not pay a dividend. Federal Signal Corporation pays out 42.4% of its earnings in the form of a dividend. Federal Signal Corporation has raised its dividend for 2 consecutive years.

Institutional & Insider Ownership

83.2% of Federal Signal Corporation shares are owned by institutional investors. Comparatively, 79.3% of Manitowoc Company, Inc. (The) shares are owned by institutional investors. 4.2% of Federal Signal Corporation shares are owned by insiders. Comparatively, 2.7% of Manitowoc Company, Inc. (The) shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for Federal Signal Corporation and Manitowoc Company, Inc. (The), as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Federal Signal Corporation 0 0 2 0 3.00
Manitowoc Company, Inc. (The) 1 5 3 0 2.22

Federal Signal Corporation currently has a consensus target price of $20.00, suggesting a potential upside of 9.23%. Manitowoc Company, Inc. (The) has a consensus target price of $6.98, suggesting a potential downside of 10.50%. Given Federal Signal Corporation’s stronger consensus rating and higher possible upside, research analysts plainly believe Federal Signal Corporation is more favorable than Manitowoc Company, Inc. (The).

Profitability

This table compares Federal Signal Corporation and Manitowoc Company, Inc. (The)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Federal Signal Corporation 5.20% 10.59% 5.78%
Manitowoc Company, Inc. (The) -14.63% -14.86% -5.74%

Volatility & Risk

Federal Signal Corporation has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500. Comparatively, Manitowoc Company, Inc. (The) has a beta of 1.46, indicating that its share price is 46% more volatile than the S&P 500.

Earnings & Valuation

This table compares Federal Signal Corporation and Manitowoc Company, Inc. (The)’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Federal Signal Corporation $765.00 million 1.43 $84.40 million $0.66 27.74
Manitowoc Company, Inc. (The) $1.43 billion 0.77 -$3.00 million ($1.51) -5.17

Federal Signal Corporation has higher revenue, but lower earnings than Manitowoc Company, Inc. (The). Manitowoc Company, Inc. (The) is trading at a lower price-to-earnings ratio than Federal Signal Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

Federal Signal Corporation beats Manitowoc Company, Inc. (The) on 12 of the 16 factors compared between the two stocks.

About Federal Signal Corporation

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 Manitowoc Company, Inc. (The)

The Manitowoc Company, Inc. is a provider of engineered lifting equipment for the construction industry. The Company operates through the Crane business segment. It designs, manufactures and distributes a line of crawler-mounted lattice-boom cranes, which it sells under the Manitowoc brand name. It also designs and manufactures a line of top-slewing and self-erecting tower cranes, which it sells under the Potain brand name. It designs and manufactures mobile telescopic cranes, which it sells under the Grove brand name and a line of hydraulically powered telescopic boom trucks, which it sells under the National Crane brand name. It also provides crane product parts and services and crane rebuilding, remanufacturing and training services, which are delivered under the Manitowoc Crane Care brand name. Its crane products are used in a range of applications, including energy production/distribution and utilities, petrochemical and industrial projects, and infrastructure applications.

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