CNH Industrial NV (NASDAQ: CNHI) and Federal Signal Corporation (NYSE:FSS) are both industrials companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, institutional ownership, valuation, profitability, earnings, analyst recommendations and dividends.

Dividends

Federal Signal Corporation pays an annual dividend of $0.28 per share and has a dividend yield of 1.4%. CNH Industrial NV does not pay a dividend. Federal Signal Corporation pays out 42.4% of its earnings in the form of a dividend. CNH Industrial NV has increased its dividend for 2 consecutive years.

Insider & Institutional Ownership

83.7% of Federal Signal Corporation shares are held by institutional investors. 4.2% of Federal Signal Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares CNH Industrial NV and Federal Signal Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CNH Industrial NV $24.18 billion 0.66 $2.44 billion N/A N/A
Federal Signal Corporation $765.00 million 1.60 $84.40 million $0.66 30.86

CNH Industrial NV has higher revenue and earnings than Federal Signal Corporation.

Profitability

This table compares CNH Industrial NV and Federal Signal Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CNH Industrial NV 3.17% 21.59% 1.91%
Federal Signal Corporation 5.20% 10.59% 5.78%

Analyst Recommendations

This is a summary of current ratings and price targets for CNH Industrial NV and Federal Signal Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CNH Industrial NV 1 4 2 0 2.14
Federal Signal Corporation 0 0 2 0 3.00

CNH Industrial NV presently has a consensus target price of $10.97, suggesting a potential downside of 6.89%. Federal Signal Corporation has a consensus target price of $20.00, suggesting a potential downside of 1.82%. Given Federal Signal Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Federal Signal Corporation is more favorable than CNH Industrial NV.

Summary

Federal Signal Corporation beats CNH Industrial NV on 8 of the 14 factors compared between the two stocks.

About CNH Industrial NV

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.

About Federal Signal Corporation

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.

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