Federal Signal Corp (FSS) stock analysis

P/E below its 5-year median

Federal Signal's P/E of 24.2 is below its own 5-year median of 27.8.

P/E above the industry

Federal Signal's P/E of 24.2 is above the Motor Vehicles and Motor Vehicle Equipment median of 18.7.

EV/EBITDA below its 5-year median

Federal Signal's EV/EBITDA of 14.7 is below its 5-year median of 17.0.

P/B above the industry

Federal Signal's price-to-book of 4.50 is above the Motor Vehicles and Motor Vehicle Equipment median of 1.56.

Trading above fair value

The share price of $116.54 is above our fair value estimate of $93.15.

Margin of safety under 20%

The price is 25.1% above fair value, so there is no margin of safety.

Revenue growing 10%+ a year

Revenue grew 15.0% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 26.7% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 25.9% over the last twelve months, against a 5-year average of 20.7% a year.

Growing faster than the industry

Revenue grew 24.0% over the last twelve months; the Motor Vehicles and Motor Vehicle Equipment median is 5.5%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin improving

Gross margin was 29.1% over the last twelve months, against 28.9% a year earlier.

Return on equity over 15%

Return on equity was 20.5% over the last twelve months and averaged 16.8% over five years.

Return on capital over 10%

Return on invested capital was 18.6%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Federal Signal's return on equity of 20.5% is above the Motor Vehicles and Motor Vehicle Equipment median of 3.5%.

Earnings grew over 5 years

Net income grew 20.7% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 11.7% over the last twelve months, against a 5-year average of 9.7%.

Net margin above the industry

Federal Signal's net margin of 11.7% is above the Motor Vehicles and Motor Vehicle Equipment median of 1.9%.

Low debt

Debt is 26.6% of shareholders' equity, under the 40% we consider low.

Debt falling against equity

Debt to equity fell from 29.9% five years ago to 26.6%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 95.8% of total debt.

Interest well covered

Operating income covers interest expense 17.9 times.

Short-term assets cover short-term debts

Current assets are 2.97 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 7.61; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Federal Signal paid dividends worth 0.5% of the share price over the last twelve months.

Yield below Treasuries

The 0.5% 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; Federal Signal yields 0.5%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 12.1% of net income.

Covered by free cash flow

Dividends take 9.9% of free cash flow.