Head to Head Analysis: Federal Signal (FSS) versus Workhorse Group (WKHS)

Federal Signal (NYSE:FSS) and Workhorse Group (NASDAQ:WKHS) are both small-cap multi-sector conglomerates companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, valuation, profitability and risk.

Valuation & Earnings

This table compares Federal Signal and Workhorse Group’s top-line 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 1.50 $61.60 million $0.85 26.35
Workhorse Group $10.85 million 2.85 -$41.21 million ($1.09) -0.50

Federal Signal has higher revenue and earnings than Workhorse Group. Workhorse Group is trading at a lower price-to-earnings ratio than Federal Signal, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Federal Signal and Workhorse Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Federal Signal 0 1 1 0 2.50
Workhorse Group 0 0 3 0 3.00

Workhorse Group has a consensus price target of $4.67, indicating a potential upside of 748.48%. Given Workhorse Group’s stronger consensus rating and higher possible upside, analysts clearly believe Workhorse Group is more favorable than Federal Signal.

Institutional & Insider Ownership

88.3% of Federal Signal shares are held by institutional investors. Comparatively, 9.1% of Workhorse Group shares are held by institutional investors. 4.3% of Federal Signal shares are held by company insiders. Comparatively, 2.8% of Workhorse Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Federal Signal and Workhorse Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Federal Signal 8.69% 16.15% 7.75%
Workhorse Group -499.90% -1,564.64% -241.24%

Dividends

Federal Signal pays an annual dividend of $0.32 per share and has a dividend yield of 1.4%. Workhorse Group does not pay a dividend. Federal Signal pays out 37.6% of its earnings in the form of a dividend.

Volatility and Risk

Federal Signal has a beta of 1.42, suggesting that its share price is 42% more volatile than the S&P 500. Comparatively, Workhorse Group has a beta of 0.09, suggesting that its share price is 91% less volatile than the S&P 500.

Summary

Federal Signal beats Workhorse Group on 11 of the 16 factors compared between the two stocks.

Federal Signal Company Profile

Federal Signal Corporation, together with its subsidiaries, designs, manufactures, and supplies a suite of products and integrated solutions for municipal, governmental, industrial, and commercial customers in the United States, Canada, Europe, and internationally. It operates through two segments, Environmental Solutions Group and Safety and Security Systems Group. The Environmental Solutions Group segment offers a range of street sweeper vehicles, sewer cleaner and vacuum loader trucks, hydro-excavation trucks, and water blasting equipment under the Elgin, Vactor, Guzzler, Westech, and Jetstream brand names. Is also manufactures dump truck bodies and trailers for maintenance and infrastructure end-markets under the Ox Bodies, Crysteel, J-Craft, Duraclass, Rugby, and Travis brand names. In addition, this segment engages in the sale of parts, service and repair, equipment rental, and training activities under the FS Solutions brand. The Safety and Security Systems Group segment provides systems and products for campus and community alerting, emergency vehicles, first responder interoperable communications, and industrial communications, as well as command and municipal networked security. Its products include vehicle lightbars and sirens, public warning sirens, general alarm systems, public address systems, and public safety software. This segment sells its products under the Federal Signal, Federal Signal VAMA, and Victor brand names. The company sells its products through wholesaler, distributor, independent manufacturer representative, original equipment manufacturer, and direct sales force, as well as independent foreign distributor. Federal Signal Corporation was founded in 1901 and is headquartered in Oak Brook, Illinois.

Workhorse Group Company Profile

Workhorse Group Inc. designs, manufactures, builds, sells, and leases battery-electric vehicles and aircraft in the United States. It operates through two divisions, Automotive and Aviation. The company also develops cloud-based and real-time telematics performance monitoring system that enables fleet operators to optimize energy and route efficiency. Its products include electric cargo vans, and medium and light-duty pickup trucks, as well as HorseFly delivery drones and truck systems. The company was formerly known as AMP Holding Inc. and changed its name to Workhorse Group Inc. in April 2015. Workhorse Group Inc. was founded in 2007 and is headquartered in Loveland, Ohio.

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