FEDERAL SIGNAL CORP (FSS) Stock Fundamental Analysis
NYSE:FSS - New York Stock Exchange, Inc. - US3138551086 - Common Stock - Currency: USD
Overall FSS gets a fundamental rating of 6 out of 10. We evaluated FSS against 128 industry peers in the Machinery industry. Both the health and profitability get an excellent rating, making FSS a very profitable company, without any liquidiy or solvency issues. FSS is valied quite expensively at the moment, while it does show a decent growth rate. This makes FSS very considerable for quality investing!
1. Profitability
1.1 Basic Checks
In the past year FSS was profitable.
In the past year FSS had a positive cash flow from operations.
FSS had positive earnings in each of the past 5 years.
Each year in the past 5 years FSS had a positive operating cash flow.
1.2 Ratios
FSS has a better Return On Assets (12.25%) than 88.28% of its industry peers.
Looking at the Return On Equity, with a value of 18.24%, FSS is in the better half of the industry, outperforming 78.91% of the companies in the same industry.
FSS has a Return On Invested Capital of 14.87%. This is amongst the best in the industry. FSS outperforms 85.94% of its industry peers.
The Average Return On Invested Capital over the past 3 years for FSS is in line with the industry average of 10.59%.
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
Looking at the Profit Margin, with a value of 11.62%, FSS is in the better half of the industry, outperforming 78.91% of the companies in the same industry.
FSS's Profit Margin has improved in the last couple of years.
FSS has a better Operating Margin (15.26%) than 74.22% of its industry peers.
In the last couple of years the Operating Margin of FSS has grown nicely.
With a Gross Margin value of 28.63%, FSS perfoms like the industry average, outperforming 45.31% of the companies in the same industry.
In the last couple of years the Gross Margin of FSS has grown nicely.
| 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
FSS has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for FSS remains at a similar level compared to 1 year ago.
The number of shares outstanding for FSS has been increased compared to 5 years ago.
The debt/assets ratio for FSS has been reduced compared to a year ago.
2.2 Solvency
FSS has an Altman-Z score of 8.26. This indicates that FSS is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 8.26, FSS belongs to the best of the industry, outperforming 91.41% of the companies in the same industry.
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.
FSS has a Debt to FCF ratio of 1.17. This is amongst the best in the industry. FSS outperforms 83.59% of its industry peers.
A Debt/Equity ratio of 0.17 indicates that FSS is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.17, FSS is in the better half of the industry, outperforming 73.44% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.17 | ||
| Debt/FCF | 1.17 | ||
| Altman-Z | 8.26 |
ROIC/WACC1.47
WACC10.08%
2.3 Liquidity
FSS has a Current Ratio of 2.66. This indicates that FSS is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 2.66, FSS is in the better half of the industry, outperforming 68.75% of the companies in the same industry.
FSS has a Quick Ratio of 1.29. This is a normal value and indicates that FSS is financially healthy and should not expect problems in meeting its short term obligations.
FSS has a Quick ratio (1.29) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.66 | ||
| Quick Ratio | 1.29 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 25.36% over the past year.
The Earnings Per Share has been growing by 13.16% on average over the past years. This is quite good.
FSS shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.06%.
The Revenue has been growing by 8.79% on average over the past years. This is quite good.
EPS 1Y (TTM)25.36%
EPS 3Y23.81%
EPS 5Y13.16%
EPS Q2Q%18.75%
Revenue 1Y (TTM)8.06%
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 13.16% 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 Y13.78%
EPS Next 2Y13.16%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year9.52%
Revenue Next 2Y8.06%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 25.24, FSS can be considered very expensive at the moment.
61.72% of the companies in the same industry are cheaper than FSS, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of FSS to the average of the S&P500 Index (24.29), we can say FSS is valued inline with the index average.
The Price/Forward Earnings ratio is 20.42, which indicates a rather expensive current valuation of FSS.
FSS's Price/Forward Earnings is on the same level as the industry average.
FSS is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 20.42, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.24 | ||
| Fwd PE | 20.42 |
4.2 Price Multiples
FSS's Enterprise Value to EBITDA is on the same level as the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of FSS is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.98 | ||
| EV/EBITDA | 15.66 |
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.
FSS's earnings are expected to grow with 13.16% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.83
PEG (5Y)1.92
EPS Next 2Y13.16%
EPS Next 3YN/A
5. Dividend
5.1 Amount
FSS has a yearly dividend return of 0.65%, which is pretty low.
Compared to an average industry Dividend Yield of 2.01, FSS has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.43, FSS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.65% |
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
13.55% of the earnings are spent on dividend by FSS. This is a low number and sustainable payout ratio.
FSS's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP13.55%
EPS Next 2Y13.16%
EPS Next 3YN/A
87.32
-0.03 (-0.03%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners100.08%
Inst Owner Change0.17%
Ins Owners1.57%
Ins Owner Change4.96%
Market Cap5.34B
Analysts78
Price Target103.84 (18.92%)
Short Float %6.99%
Short Ratio6.25
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.65% |
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)-0.97%
PT rev (3m)2.21%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-6.61%
EPS NY rev (1m)0%
EPS NY rev (3m)0.54%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.21%
Revenue NY rev (1m)0%
Revenue NY rev (3m)2.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.24 | ||
| Fwd PE | 20.42 | ||
| P/S | 2.87 | ||
| P/FCF | 27.98 | ||
| P/OCF | 23.07 | ||
| P/B | 4.5 | ||
| P/tB | 10.49 | ||
| EV/EBITDA | 15.66 |
EPS(TTM)3.46
EY3.96%
EPS(NY)4.28
Fwd EY4.9%
FCF(TTM)3.12
FCFY3.57%
OCF(TTM)3.79
OCFY4.34%
SpS30.47
BVpS19.41
TBVpS8.33
PEG (NY)1.83
PEG (5Y)1.92
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 | 8.26 |
F-Score7
WACC10.08%
ROIC/WACC1.47
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 Y13.78%
EPS Next 2Y13.16%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)8.06%
Revenue growth 3Y15.34%
Revenue growth 5Y8.79%
Sales Q2Q%9.16%
Revenue Next Year9.52%
Revenue Next 2Y8.06%
Revenue Next 3Y7.04%
Revenue Next 5Y7.43%
EBIT growth 1Y26.28%
EBIT growth 3Y30.22%
EBIT growth 5Y13.68%
EBIT Next Year38.31%
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%