FEDERAL SIGNAL CORP (FSS) Stock Fundamental Analysis
NYSE:FSS - New York Stock Exchange, Inc. - US3138551086 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to FSS. FSS was compared to 127 industry peers in the Machinery industry. FSS gets an excellent profitability rating and is at the same time showing great financial health properties. FSS is valied quite expensively at the moment, while it does show a decent growth rate. These ratings would make FSS suitable for quality investing!
1. Profitability
1.1 Basic Checks
FSS had positive earnings in the past year.
In the past year FSS had a positive cash flow from operations.
Each year in the past 5 years FSS has been profitable.
FSS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
FSS has a Return On Assets of 12.25%. This is amongst the best in the industry. FSS outperforms 85.60% of its industry peers.
The Return On Equity of FSS (18.24%) is better than 79.20% of its industry peers.
FSS's Return On Invested Capital of 14.87% is amongst the best of the industry. FSS outperforms 84.80% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for FSS is in line with the industry average of 10.84%.
The last Return On Invested Capital (14.87%) for FSS is above the 3 year average (12.32%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.25% | ||
| ROE | 18.24% | ||
| ROIC | 14.87% |
ROA(3y)9.96%
ROA(5y)9.04%
ROE(3y)15.98%
ROE(5y)14.89%
ROIC(3y)12.32%
ROIC(5y)11.14%
1.3 Margins
FSS's Profit Margin of 11.62% is fine compared to the rest of the industry. FSS outperforms 80.00% of its industry peers.
In the last couple of years the Profit Margin of FSS has grown nicely.
FSS has a Operating Margin of 15.26%. This is in the better half of the industry: FSS outperforms 74.40% of its industry peers.
In the last couple of years the Operating Margin of FSS has grown nicely.
The Gross Margin of FSS (28.63%) is comparable to the rest of the industry.
FSS's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.26% | ||
| PM (TTM) | 11.62% | ||
| GM | 28.63% |
OM growth 3Y12.91%
OM growth 5Y4.49%
PM growth 3Y11.9%
PM growth 5Y5.52%
GM growth 3Y6.36%
GM growth 5Y1.61%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), FSS is creating some value.
Compared to 1 year ago, FSS has about the same amount of shares outstanding.
The number of shares outstanding for FSS has been increased compared to 5 years ago.
FSS has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 7.88 indicates that FSS is not in any danger for bankruptcy at the moment.
FSS's Altman-Z score of 7.88 is amongst the best of the industry. FSS outperforms 89.60% of its industry peers.
FSS has a debt to FCF ratio of 1.17. This is a very positive value and a sign of high solvency as it would only need 1.17 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 1.17, FSS belongs to the best of the industry, outperforming 84.80% of the companies in the same industry.
FSS has a Debt/Equity ratio of 0.17. This is a healthy value indicating a solid balance between debt and equity.
FSS's Debt to Equity ratio of 0.17 is fine compared to the rest of the industry. FSS outperforms 72.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.17 | ||
| Debt/FCF | 1.17 | ||
| Altman-Z | 7.88 |
ROIC/WACC1.33
WACC11.17%
2.3 Liquidity
A Current Ratio of 2.66 indicates that FSS has no problem at all paying its short term obligations.
FSS has a Current ratio of 2.66. This is in the better half of the industry: FSS outperforms 69.60% of its industry peers.
A Quick Ratio of 1.29 indicates that FSS should not have too much problems paying its short term obligations.
FSS has a Quick ratio of 1.29. This is comparable to the rest of the industry: FSS outperforms 48.80% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.66 | ||
| Quick Ratio | 1.29 |
3. Growth
3.1 Past
FSS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 29.46%, which is quite impressive.
FSS shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.16% yearly.
The Revenue has grown by 8.06% in the past year. This is quite good.
FSS shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.79% yearly.
EPS 1Y (TTM)29.46%
EPS 3Y23.81%
EPS 5Y13.16%
EPS Q2Q%17.57%
Revenue 1Y (TTM)8.06%
Revenue growth 3Y15.34%
Revenue growth 5Y8.79%
Sales Q2Q%5.26%
3.2 Future
FSS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.56% yearly.
Based on estimates for the next years, FSS will show a small growth in Revenue. The Revenue will grow by 7.43% on average per year.
EPS Next Y13.1%
EPS Next 2Y12.56%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year7.09%
Revenue Next 2Y6.78%
Revenue Next 3Y7.04%
Revenue Next 5Y7.43%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 23.99, the valuation of FSS can be described as rather expensive.
The rest of the industry has a similar Price/Earnings ratio as FSS.
FSS's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 29.75.
With a Price/Forward Earnings ratio of 21.21, FSS is valued on the expensive side.
FSS's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.44, FSS is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.99 | ||
| Fwd PE | 21.21 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as FSS.
The rest of the industry has a similar Price/Free Cash Flow ratio as FSS.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.67 | ||
| EV/EBITDA | 14.6 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates FSS does not grow enough to justify the current Price/Earnings ratio.
FSS has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as FSS's earnings are expected to grow with 12.56% in the coming years.
PEG (NY)1.83
PEG (5Y)1.82
EPS Next 2Y12.56%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a yearly dividend of 0.69%, FSS is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.74, FSS has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.30, FSS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.69% |
5.2 History
The dividend of FSS is nicely growing with an annual growth rate of 8.46%!
FSS has paid a dividend for at least 10 years, which is a reliable track record.
FSS has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)8.46%
Div Incr Years2
Div Non Decr Years10
5.3 Sustainability
FSS pays out 13.55% of its income as dividend. This is a sustainable payout ratio.
The dividend of FSS is growing, but earnings are growing more, so the dividend growth is sustainable.
DP13.55%
EPS Next 2Y12.56%
EPS Next 3YN/A
80.11
-1.17 (-1.44%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners100.08%
Inst Owner Change3.54%
Ins Owners1.57%
Ins Owner Change4.06%
Market Cap4.90B
Analysts76.36
Price Target106.08 (32.42%)
Short Float %4.63%
Short Ratio7.71
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.69% |
Yearly Dividend0.48
Dividend Growth(5Y)8.46%
DP13.55%
Div Incr Years2
Div Non Decr Years10
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.55%
Min EPS beat(2)-1.15%
Max EPS beat(2)4.26%
EPS beat(4)3
Avg EPS beat(4)6.68%
Min EPS beat(4)-1.15%
Max EPS beat(4)12.12%
EPS beat(8)7
Avg EPS beat(8)8.13%
EPS beat(12)10
Avg EPS beat(12)8.37%
EPS beat(16)14
Avg EPS beat(16)8.24%
Revenue beat(2)0
Avg Revenue beat(2)-2.77%
Min Revenue beat(2)-3.02%
Max Revenue beat(2)-2.52%
Revenue beat(4)0
Avg Revenue beat(4)-1.71%
Min Revenue beat(4)-3.02%
Max Revenue beat(4)-0.13%
Revenue beat(8)4
Avg Revenue beat(8)0.46%
Revenue beat(12)6
Avg Revenue beat(12)0.52%
Revenue beat(16)7
Avg Revenue beat(16)0.27%
PT rev (1m)4.42%
PT rev (3m)7.22%
EPS NQ rev (1m)-2%
EPS NQ rev (3m)-2.3%
EPS NY rev (1m)-0.07%
EPS NY rev (3m)0.15%
Revenue NQ rev (1m)-0.93%
Revenue NQ rev (3m)-1.53%
Revenue NY rev (1m)-0.2%
Revenue NY rev (3m)-0.39%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.99 | ||
| Fwd PE | 21.21 | ||
| P/S | 2.63 | ||
| P/FCF | 25.67 | ||
| P/OCF | 21.17 | ||
| P/B | 4.13 | ||
| P/tB | 9.62 | ||
| EV/EBITDA | 14.6 |
EPS(TTM)3.34
EY4.17%
EPS(NY)3.78
Fwd EY4.72%
FCF(TTM)3.12
FCFY3.9%
OCF(TTM)3.78
OCFY4.72%
SpS30.46
BVpS19.41
TBVpS8.32
PEG (NY)1.83
PEG (5Y)1.82
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.25% | ||
| ROE | 18.24% | ||
| ROCE | 18.64% | ||
| ROIC | 14.87% | ||
| ROICexc | 15.81% | ||
| ROICexgc | 30% | ||
| OM | 15.26% | ||
| PM (TTM) | 11.62% | ||
| GM | 28.63% | ||
| FCFM | 10.24% |
ROA(3y)9.96%
ROA(5y)9.04%
ROE(3y)15.98%
ROE(5y)14.89%
ROIC(3y)12.32%
ROIC(5y)11.14%
ROICexc(3y)12.94%
ROICexc(5y)11.74%
ROICexgc(3y)25.46%
ROICexgc(5y)24.23%
ROCE(3y)15.45%
ROCE(5y)13.96%
ROICexcg growth 3Y14.81%
ROICexcg growth 5Y1.2%
ROICexc growth 3Y21.22%
ROICexc growth 5Y5.23%
OM growth 3Y12.91%
OM growth 5Y4.49%
PM growth 3Y11.9%
PM growth 5Y5.52%
GM growth 3Y6.36%
GM growth 5Y1.61%
F-Score7
Asset Turnover1.05
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.17 | ||
| Debt/FCF | 1.17 | ||
| Debt/EBITDA | 0.59 | ||
| Cap/Depr | 62.17% | ||
| Cap/Sales | 2.18% | ||
| Interest Coverage | 18.56 | ||
| Cash Conversion | 66.22% | ||
| Profit Quality | 88.16% | ||
| Current Ratio | 2.66 | ||
| Quick Ratio | 1.29 | ||
| Altman-Z | 7.88 |
F-Score7
WACC11.17%
ROIC/WACC1.33
Cap/Depr(3y)69.74%
Cap/Depr(5y)69.95%
Cap/Sales(3y)2.54%
Cap/Sales(5y)2.67%
Profit Quality(3y)69.35%
Profit Quality(5y)76.55%
High Growth Momentum
Growth
EPS 1Y (TTM)29.46%
EPS 3Y23.81%
EPS 5Y13.16%
EPS Q2Q%17.57%
EPS Next Y13.1%
EPS Next 2Y12.56%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)8.06%
Revenue growth 3Y15.34%
Revenue growth 5Y8.79%
Sales Q2Q%5.26%
Revenue Next Year7.09%
Revenue Next 2Y6.78%
Revenue Next 3Y7.04%
Revenue Next 5Y7.43%
EBIT growth 1Y26.28%
EBIT growth 3Y30.22%
EBIT growth 5Y13.68%
EBIT Next Year33.02%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y16.21%
FCF growth 3Y43.6%
FCF growth 5Y23.01%
OCF growth 1Y18.98%
OCF growth 3Y31.46%
OCF growth 5Y17.54%