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 128 industry peers in the Machinery industry. FSS scores excellent points on both the profitability and health parts. This is a solid base for a good stock. While showing a medium growth rate, FSS is valued expensive at the moment. With these ratings, FSS could be worth investigating further for quality investing!.
1. Profitability
1.1 Basic Checks
FSS had positive earnings in the past year.
FSS had a positive operating cash flow in the past year.
FSS had positive earnings in each of the past 5 years.
FSS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of FSS (11.24%) is better than 82.81% of its industry peers.
With a decent Return On Equity value of 17.56%, FSS is doing good in the industry, outperforming 75.78% of the companies in the same industry.
FSS's Return On Invested Capital of 14.69% is amongst the best of the industry. FSS outperforms 85.16% 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 10.71%.
The last Return On Invested Capital (14.69%) for FSS is above the 3 year average (12.32%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.24% | ||
| ROE | 17.56% | ||
| ROIC | 14.69% |
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 has a Profit Margin of 11.11%. This is in the better half of the industry: FSS outperforms 76.56% of its industry peers.
FSS's Profit Margin has improved in the last couple of years.
FSS's Operating Margin of 15.52% is fine compared to the rest of the industry. FSS outperforms 73.44% of its industry peers.
FSS's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 28.83%, FSS is in line with its industry, outperforming 45.31% of the companies in the same industry.
FSS's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.52% | ||
| PM (TTM) | 11.11% | ||
| GM | 28.83% |
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.
The number of shares outstanding for FSS remains at a similar level compared to 1 year ago.
FSS has more shares outstanding than it did 5 years ago.
FSS has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 8.57 indicates that FSS is not in any danger for bankruptcy at the moment.
FSS has a Altman-Z score of 8.57. This is amongst the best in the industry. FSS outperforms 90.63% of its industry peers.
The Debt to FCF ratio of FSS is 1.39, which is an excellent value as it means it would take FSS, only 1.39 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.39, FSS belongs to the top of the industry, outperforming 80.47% of the companies in the same industry.
FSS has a Debt/Equity ratio of 0.22. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.22, FSS is in the better half of the industry, outperforming 68.75% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.22 | ||
| Debt/FCF | 1.39 | ||
| Altman-Z | 8.57 |
ROIC/WACC1.49
WACC9.88%
2.3 Liquidity
FSS has a Current Ratio of 2.39. This indicates that FSS is financially healthy and has no problem in meeting its short term obligations.
FSS has a Current ratio of 2.39. This is in the better half of the industry: FSS outperforms 60.94% of its industry peers.
A Quick Ratio of 1.09 indicates that FSS should not have too much problems paying its short term obligations.
The Quick ratio of FSS (1.09) is worse than 60.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.39 | ||
| Quick Ratio | 1.09 |
3. Growth
3.1 Past
FSS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 25.36%, which is quite impressive.
The Earnings Per Share has been growing by 13.16% on average over the past years. This is quite good.
The Revenue has been growing slightly by 7.85% in the past year.
Measured over the past years, FSS shows a quite strong growth in Revenue. The Revenue has been growing by 8.79% on average per year.
EPS 1Y (TTM)25.36%
EPS 3Y23.81%
EPS 5Y13.16%
EPS Q2Q%18.75%
Revenue 1Y (TTM)7.85%
Revenue growth 3Y15.34%
Revenue growth 5Y8.79%
Sales Q2Q%9.16%
3.2 Future
Based on estimates for the next years, FSS will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.03% on average per year.
FSS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.43% yearly.
EPS Next Y15.54%
EPS Next 2Y14.03%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year9.74%
Revenue Next 2Y8.43%
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
The Price/Earnings ratio is 31.80, which means the current valuation is very expensive for FSS.
Based on the Price/Earnings ratio, FSS is valued a bit more expensive than the industry average as 63.28% of the companies are valued more cheaply.
When comparing the Price/Earnings ratio of FSS to the average of the S&P500 Index (27.29), we can say FSS is valued inline with the index average.
Based on the Price/Forward Earnings ratio of 25.33, the valuation of FSS can be described as expensive.
62.50% of the companies in the same industry are cheaper than FSS, based on the Price/Forward Earnings ratio.
FSS is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.74, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.8 | ||
| Fwd PE | 25.33 |
4.2 Price Multiples
61.72% of the companies in the same industry are cheaper than FSS, based on the Enterprise Value to EBITDA ratio.
FSS's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. FSS is more expensive than 60.94% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.67 | ||
| EV/EBITDA | 19.03 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
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 14.03% in the coming years.
PEG (NY)2.05
PEG (5Y)2.42
EPS Next 2Y14.03%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a yearly dividend of 0.51%, FSS is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.81, FSS has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.37, FSS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.51% |
5.2 History
The dividend of FSS is nicely growing with an annual growth rate of 8.46%!
FSS has been paying a dividend for at least 10 years, so it has 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 14.49% 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.
DP14.49%
EPS Next 2Y14.03%
EPS Next 3YN/A
110.02
-0.77 (-0.7%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners103.59%
Inst Owner Change-0.03%
Ins Owners1.73%
Ins Owner Change5.48%
Market Cap6.71B
Analysts80
Price Target105.57 (-4.04%)
Short Float %8.67%
Short Ratio9.83
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.51% |
Yearly Dividend0.48
Dividend Growth(5Y)8.46%
DP14.49%
Div Incr Years2
Div Non Decr Years10
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.84%
Min EPS beat(2)-1.15%
Max EPS beat(2)2.84%
EPS beat(4)3
Avg EPS beat(4)4.36%
Min EPS beat(4)-1.15%
Max EPS beat(4)11.51%
EPS beat(8)7
Avg EPS beat(8)6.81%
EPS beat(12)10
Avg EPS beat(12)6.55%
EPS beat(16)14
Avg EPS beat(16)7.6%
Revenue beat(2)0
Avg Revenue beat(2)-1.88%
Min Revenue beat(2)-3.02%
Max Revenue beat(2)-0.74%
Revenue beat(4)0
Avg Revenue beat(4)-1.6%
Min Revenue beat(4)-3.02%
Max Revenue beat(4)-0.13%
Revenue beat(8)3
Avg Revenue beat(8)-0.01%
Revenue beat(12)5
Avg Revenue beat(12)-0.21%
Revenue beat(16)7
Avg Revenue beat(16)0.29%
PT rev (1m)1.27%
PT rev (3m)0.68%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.05%
EPS NY rev (1m)0%
EPS NY rev (3m)1.55%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.28%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.19%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.8 | ||
| Fwd PE | 25.33 | ||
| P/S | 3.53 | ||
| P/FCF | 33.67 | ||
| P/OCF | 28.3 | ||
| P/B | 5.58 | ||
| P/tB | 14.51 | ||
| EV/EBITDA | 19.03 |
EPS(TTM)3.46
EY3.14%
EPS(NY)4.34
Fwd EY3.95%
FCF(TTM)3.27
FCFY2.97%
OCF(TTM)3.89
OCFY3.53%
SpS31.17
BVpS19.72
TBVpS7.58
PEG (NY)2.05
PEG (5Y)2.42
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.24% | ||
| ROE | 17.56% | ||
| ROCE | 18.43% | ||
| ROIC | 14.69% | ||
| ROICexc | 15.24% | ||
| ROICexgc | 29.28% | ||
| OM | 15.52% | ||
| PM (TTM) | 11.11% | ||
| GM | 28.83% | ||
| FCFM | 10.48% |
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 Turnover1.01
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.22 | ||
| Debt/FCF | 1.39 | ||
| Debt/EBITDA | 0.73 | ||
| Cap/Depr | 54.78% | ||
| Cap/Sales | 1.99% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 65.11% | ||
| Profit Quality | 94.32% | ||
| Current Ratio | 2.39 | ||
| Quick Ratio | 1.09 | ||
| Altman-Z | 8.57 |
F-Score7
WACC9.88%
ROIC/WACC1.49
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)25.36%
EPS 3Y23.81%
EPS 5Y13.16%
EPS Q2Q%18.75%
EPS Next Y15.54%
EPS Next 2Y14.03%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)7.85%
Revenue growth 3Y15.34%
Revenue growth 5Y8.79%
Sales Q2Q%9.16%
Revenue Next Year9.74%
Revenue Next 2Y8.43%
Revenue Next 3Y7.04%
Revenue Next 5Y7.43%
EBIT growth 1Y23.12%
EBIT growth 3Y30.22%
EBIT growth 5Y13.68%
EBIT Next Year40.77%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y327.47%
FCF growth 3Y43.6%
FCF growth 5Y23.01%
OCF growth 1Y229.62%
OCF growth 3Y31.46%
OCF growth 5Y17.54%