Federal Signal (NYSE: FSS) and CNH Industrial (NYSE:CNHI) are both multi-sector conglomerates companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, institutional ownership, dividends, profitability, analyst recommendations, earnings and valuation.
This table compares Federal Signal and CNH Industrial’s net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
This is a breakdown of current ratings for Federal Signal and CNH Industrial, as provided by MarketBeat.
||Strong Buy Ratings
Federal Signal presently has a consensus target price of $20.00, indicating a potential upside of 0.10%. CNH Industrial has a consensus target price of $14.61, indicating a potential downside of 2.78%. Given Federal Signal’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Federal Signal is more favorable than CNH Industrial.
Federal Signal pays an annual dividend of $0.28 per share and has a dividend yield of 1.4%. CNH Industrial pays an annual dividend of $0.12 per share and has a dividend yield of 0.8%. Federal Signal pays out 38.4% of its earnings in the form of a dividend. CNH Industrial pays out 54.5% 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 is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings and Valuation
This table compares Federal Signal and CNH Industrial’s revenue, earnings per share and valuation.
||Earnings Per Share
Federal Signal has higher earnings, but lower revenue than CNH Industrial. Federal Signal is trading at a lower price-to-earnings ratio than CNH Industrial, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
84.2% of Federal Signal shares are held by institutional investors. Comparatively, 18.2% of CNH Industrial shares are held by institutional investors. 4.2% of Federal Signal shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Volatility & Risk
Federal Signal has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500. Comparatively, CNH Industrial has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500.
Federal Signal beats CNH Industrial on 12 of the 16 factors compared between the two stocks.
About Federal Signal
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.
About CNH Industrial
CNH Industrial N.V. is a capital goods company. The Company is engaged in the design, production, marketing, sale and financing of agricultural and construction equipment, trucks, commercial vehicles, buses and specialty vehicles for firefighting, defense and other uses, as well as engines, transmissions and axles for vehicles and engines under marine and power generation applications. Its segments include Agricultural Equipment, which designs, manufactures and distributes farm machinery and implements; Construction Equipment, which designs, manufactures and distributes construction equipment; Commercial Vehicles, which designs, produces and sells a range of light, medium and heavy vehicles for the transportation and distribution of goods; Powertrain, which designs, manufactures and offers a range of propulsion and transmission systems, and axles for on- and off-road applications, and Financial Services, which offers a range of financial services to dealers and customers.
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