Head to Head Contrast: Terex Corporation (TEX) & Federal Signal Corporation (FSS)
Terex Corporation (NYSE: TEX) and Federal Signal Corporation (NYSE:FSS) are both industrial products companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, dividends, earnings and analyst recommendations.
Terex Corporation pays an annual dividend of $0.32 per share and has a dividend yield of 0.8%. Federal Signal Corporation pays an annual dividend of $0.28 per share and has a dividend yield of 1.5%. Terex Corporation pays out -50.8% of its earnings in the form of a dividend. Federal Signal Corporation pays out 42.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Terex Corporation has raised its dividend for 2 consecutive years and Federal Signal Corporation has raised its dividend for 3 consecutive years. Federal Signal Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Terex Corporation and Federal Signal Corporation’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%|
Valuation and Earnings
This table compares Terex Corporation and Federal Signal Corporation’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Terex Corporation||$4.22 billion||0.83||$152.10 million||($0.63)||-62.16|
|Federal Signal Corporation||$765.00 million||1.44||$84.40 million||$0.66||27.85|
Terex Corporation has higher revenue and earnings than Federal Signal Corporation. Terex Corporation 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.
Insider and Institutional Ownership
99.3% of Terex Corporation shares are owned by institutional investors. Comparatively, 81.4% of Federal Signal Corporation shares are owned by institutional investors. 2.5% of Terex Corporation shares are owned by insiders. Comparatively, 4.2% of Federal Signal Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Volatility & Risk
Terex Corporation has a beta of 1.85, meaning that its stock price is 85% more volatile than the S&P 500. Comparatively, Federal Signal Corporation has a beta of 1.37, meaning that its stock price is 37% more volatile than the S&P 500.
This is a summary of current ratings for Terex Corporation and Federal Signal Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Federal Signal Corporation||0||0||2||0||3.00|
Terex Corporation currently has a consensus target price of $36.15, indicating a potential downside of 7.68%. Federal Signal Corporation has a consensus target price of $20.00, indicating a potential upside of 8.81%. Given Federal Signal Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Federal Signal Corporation is more favorable than Terex Corporation.
Federal Signal Corporation beats Terex Corporation on 10 of the 17 factors compared between the two stocks.
Terex Corporation Company Profile
Terex Corporation is a manufacturer of lifting and material processing products and services that deliver lifecycle solutions. The Company has three business segments: Aerial Work Platforms (AWP), Cranes and Materials Processing (MP). It delivers lifecycle solutions to a range of industries, including the construction, infrastructure, manufacturing, shipping, utility, quarrying and mining industries. The AWP segment designs, manufactures, services and markets aerial work platform equipment, telehandlers and light towers. The AWP segment’s products are used by its customers to construct and maintain industrial, commercial and residential buildings and facilities, and for other commercial operations, as well as in a range of infrastructure projects. The Cranes segment’s products are used by its customers for construction and manufacturing facilities, among others. The MP segment’s products are used by its customers in construction, infrastructure and recycling projects.
Federal Signal Corporation 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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