Federal Signal (NYSE: FSS) and ITT (NYSE:ITT) are both multi-sector conglomerates companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, dividends, valuation, risk, institutional ownership, analyst recommendations and earnings.
Risk and Volatility
Federal Signal has a beta of 1.18, meaning that its share price is 18% more volatile than the S&P 500. Comparatively, ITT has a beta of 1.59, meaning that its share price is 59% more volatile than the S&P 500.
Federal Signal pays an annual dividend of $0.28 per share and has a dividend yield of 1.3%. ITT pays an annual dividend of $0.54 per share and has a dividend yield of 1.1%. Federal Signal pays out 27.5% of its earnings in the form of a dividend. ITT pays out 42.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Federal Signal has increased its dividend for 5 consecutive years. Federal Signal is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a breakdown of current ratings and price targets for Federal Signal and ITT, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Federal Signal presently has a consensus price target of $20.00, suggesting a potential downside of 8.17%. ITT has a consensus price target of $55.71, suggesting a potential upside of 13.98%. Given ITT’s stronger consensus rating and higher probable upside, analysts plainly believe ITT is more favorable than Federal Signal.
Valuation & Earnings
This table compares Federal Signal and ITT’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Federal Signal||$898.50 million||1.45||$61.60 million||$1.02||21.35|
|ITT||$2.59 billion||1.67||$113.50 million||$1.28||38.19|
ITT has higher revenue and earnings than Federal Signal. Federal Signal is trading at a lower price-to-earnings ratio than ITT, indicating that it is currently the more affordable of the two stocks.
This table compares Federal Signal and ITT’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider & Institutional Ownership
87.6% of Federal Signal shares are held by institutional investors. Comparatively, 94.2% of ITT shares are held by institutional investors. 4.2% of Federal Signal shares are held by company insiders. Comparatively, 1.2% of ITT shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
ITT beats Federal Signal on 12 of the 17 factors compared between the two stocks.
Federal Signal Company Profile
Federal Signal Corporation designs, manufactures and supplies a suite of products and integrated solutions for municipal, governmental, industrial and commercial customers. The Company’s segments include the Environmental Solutions Group and the Safety and Security Systems Group. Its Environmental Solutions Group manufactures and supplies a range of street sweeper vehicles, sewer cleaner and vacuum loader trucks, hydro-excavation trucks and waterblasting equipment. The products are sold to both municipal and industrial customers under the Elgin, Vactor, Guzzler and Jetstream brand names. Safety and Security Systems is a manufacturer and supplier of systems and products that law enforcement, fire rescue, emergency medical services, campuses military facilities and industrial sites use to protect people and property. It offers systems for campus and community alerting, emergency vehicles, first responder interoperable communications and industrial communications, among others.
ITT Company Profile
ITT Corporation (ITT) is a diversified manufacturer of engineered critical components and technology solutions for industrial markets. The Company’s product and service offerings are organized in four segments: Industrial Process, Motion Technologies, Interconnect Solutions and Control Technologies. Industrial Process manufactures engineered fluid process equipment, and is a provider of plant optimization, solutions and aftermarket services and parts. Motion Technologies manufactures brake components, shock absorbers and damping technologies for the automotive, truck and trailer, public bus and rail transportation markets. Interconnect Solutions manufactures and designs a range of engineered connector solutions that makes it possible to transfer signal and power between electronic devices. Control Technologies manufactures equipment, including actuation, valves, and noise and energy absorption components for the aerospace and defense, and industrial markets.
Receive News & Ratings for Federal Signal Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Federal Signal and related companies with MarketBeat.com's FREE daily email newsletter.