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

Institutional and Insider Ownership

84.2% of Federal Signal shares are held by institutional investors. Comparatively, 82.3% of shares of all “Heavy Machinery & Vehicles” companies are held by institutional investors. 4.2% of Federal Signal shares are held by insiders. Comparatively, 8.3% of shares of all “Heavy Machinery & Vehicles” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Federal Signal pays an annual dividend of $0.28 per share and has a dividend yield of 1.3%. Federal Signal pays out 38.9% 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.

Valuation & Earnings

This table compares Federal Signal and its competitors top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Federal Signal $707.90 million $43.80 million 29.81
Federal Signal Competitors $6.06 billion $48.37 million 167.39

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.

Analyst Recommendations

This is a summary of recent ratings and target prices 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 171 878 960 17 2.41

Federal Signal presently has a consensus target price of $20.00, suggesting a potential downside of 6.80%. As a group, “Heavy Machinery & Vehicles” companies have a potential upside of 6.50%. Given Federal Signal’s competitors higher possible upside, analysts plainly believe Federal Signal has less favorable growth aspects than its competitors.

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%

Risk & Volatility

Federal Signal has a beta of 1.32, meaning that its stock price is 32% more volatile than the S&P 500. Comparatively, Federal Signal’s competitors have a beta of 1.44, meaning that their average stock price is 44% more volatile than the S&P 500.

Summary

Federal Signal competitors beat Federal Signal on 9 of the 15 factors compared.

Federal Signal Company Profile

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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