Franklin Electric Co Inc (FELE) stock analysis

P/E below its 5-year median

Franklin Electric's P/E of 22.2 is below its own 5-year median of 24.6.

P/E below the industry

Franklin Electric's P/E of 22.2 is below the Electronic and Other Electrical Equipment and Components, except Computer Equipment median of 31.4.

EV/EBITDA below its 5-year median

Franklin Electric's EV/EBITDA of 13.7 is below its 5-year median of 14.5.

P/B below the industry

Franklin Electric's price-to-book of 3.02 is below the Electronic and Other Electrical Equipment and Components, except Computer Equipment median of 6.03.

Trading below fair value

The share price of $98.88 is below our fair value estimate of $119.87.

Margin of safety under 20%

The price is 17.5% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 1.4% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -6.7% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 41.3% over the last twelve months, against a 5-year average of 7.9% a year.

Growing slower than the industry

Revenue grew 7.3% over the last twelve months; the Electronic and Other Electrical Equipment and Components, except Computer Equipment median is 13.5%.

Guidance raised

Franklin Electric raised its full year 2026 net sales outlook on Jul 28, 2026.

Gross margin slipping

Gross margin was 35.4% over the last twelve months, against 35.5% a year earlier.

Return on equity under 15%

Return on equity was 14.5% over the last twelve months and averaged 15.7% over five years; we look for 15% on both.

Return on capital over 10%

Return on invested capital was 13.1%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Franklin Electric's return on equity of 14.5% is above the Electronic and Other Electrical Equipment and Components, except Computer Equipment median of 12.0%.

Earnings grew over 5 years

Net income grew 7.9% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 8.8% over the last twelve months, against a 5-year average of 8.7%.

Net margin above the industry

Franklin Electric's net margin of 8.8% is above the Electronic and Other Electrical Equipment and Components, except Computer Equipment median of 5.8%.

Low debt

Debt is 38.8% of shareholders' equity, under the 40% we consider low.

Debt rising against equity

Debt to equity rose from 11.1% five years ago to 38.8%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 43.4% of total debt.

Interest well covered

Operating income covers interest expense 21.4 times.

Short-term assets cover short-term debts

Current assets are 2.33 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 4.35; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Franklin Electric paid dividends worth 1.1% of the share price over the last twelve months.

Yield below Treasuries

The 1.1% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Franklin Electric yields 1.1%.

Dividend stability

Fewer than five years of dividend history.

Covered by earnings

Dividends take 25.1% of net income.

Covered by free cash flow

Dividends take 25.9% of free cash flow.