Federal Signal (NYSE:FSS – Get Free Report) and GEA Group (OTCMKTS:GEAGF – Get Free Report) are both industrials companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, risk, valuation, profitability and institutional ownership.
Analyst Recommendations
This is a summary of current recommendations for Federal Signal and GEA Group, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Federal Signal | 0 | 2 | 3 | 1 | 2.83 |
| GEA Group | 0 | 1 | 0 | 1 | 3.00 |
Federal Signal presently has a consensus price target of $140.50, suggesting a potential upside of 19.59%. Given Federal Signal’s higher possible upside, analysts clearly believe Federal Signal is more favorable than GEA Group.
Volatility and Risk
Insider & Institutional Ownership
92.7% of Federal Signal shares are owned by institutional investors. 3.3% of Federal Signal shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Earnings & Valuation
This table compares Federal Signal and GEA Group”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Federal Signal | $2.18 billion | 3.29 | $246.60 million | $4.64 | 25.32 |
| GEA Group | $6.22 billion | 1.85 | $468.41 million | $2.42 | 29.12 |
GEA Group has higher revenue and earnings than Federal Signal. Federal Signal is trading at a lower price-to-earnings ratio than GEA Group, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Federal Signal and GEA Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Federal Signal | 11.66% | 21.36% | 13.07% |
| GEA Group | 7.70% | 18.30% | 7.57% |
Summary
Federal Signal beats GEA Group on 10 of the 14 factors compared between the two stocks.
About Federal Signal
Federal Signal Corp. engages in the design and manufacture of products and integrated solutions for municipal, governmental, industrial, and commercial customers. It operates through the Environmental Solutions Group and Safety and Security Systems Group segments. The Environment Solutions Group segment is involved in the manufacture and supply of street sweeper vehicles, sewer cleaners, vacuum loader trucks, hydro-excavation trucks, and water blasting equipment. The Safety and Security Systems Group segment offers comprehensive systems and products that law enforcement, fire rescue, emergency medical services, campuses, military facilities, and industrial sites use to protect people and property. The company was founded in 1901 and is headquartered in Oak Brook, IL.
About GEA Group
GEA Group Aktiengesellschaft engages in the development and production of systems and components to the food, beverage, and pharmaceutical industries. It operates through Separation & Flow Technologies, Liquid & Power Technologies, Food & Health Technologies, Farm Technologies, and Heating & Refrigeration Technologies segments. The Separation & Flow Technologies segment manufacture process-related components and machinery including notably separators, decanters, homogenizers, valves, and pumps. The Liquid & Power Technologies segment offers brewing systems, liquid processing and filling, concentration, precision fermentation, crystallization, purification, drying, powder handling, and packaging, as well as systems for emission control for dairy, beverage, food, chemical, and other industries. The Food & Health Technologies segment engages in the preparation, marination, and processing of meat, poultry, seafood, and vegan products, pasta and confectionery products, baking, slicing, packaging, and frozen food processing for food processing industry; and provides tablet presses for pharmaceutical industry. The Farm Technologies segment offers customer solution for milk production and livestock farming, which includes automatic milking and feeding system, conventional milking solutions, manure handling, and digital herd management tool. The Heating & Refrigeration Technologies segment provides energy solution in the field of industrial refrigeration and heating for an array of industries including food, beverage, dairy, and oil and gas. The company was formerly known as mg technologies ag and changed its name to GEA Group Aktiengesellschaft in 2005. GEA Group Aktiengesellschaft was founded in 1881 and is headquartered in Düsseldorf, Germany.
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