Federal Signal (NYSE:FSS) Hits New 52-Week High on Better-Than-Expected Earnings

Key Points

• Federal Signal reached a new 52-week high of $127.00 after reporting quarterly earnings of $1.17 EPS, exceeding analysts' expectations by $0.11.
• The company announced a $0.14 quarterly dividend to be paid on August 28th, representing an annual yield of 0.45% with a payout ratio of 16.37%.
• A $150 million share buyback program was authorized, indicating the board's belief that the stock is currently undervalued.

Federal Signal Corporation (NYSE:FSS - Get Free Report) reached a new 52-week high during trading on Wednesday following a stronger than expected earnings report. The company traded as high as $127.00 and last traded at $124.77, with a volume of 460017 shares traded. The stock had previously closed at $104.86.

The conglomerate reported $1.17 EPS for the quarter, topping analysts' consensus estimates of $1.06 by $0.11. The firm had revenue of $564.60 million during the quarter, compared to analyst estimates of $537.24 million. Federal Signal had a return on equity of 18.91% and a net margin of 11.22%. The company's revenue for the quarter was up 15.1% on a year-over-year basis. During the same period in the previous year, the company posted $0.95 EPS.

Federal Signal Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, August 28th. Shareholders of record on Friday, August 15th will be issued a dividend of $0.14 per share. This represents a $0.56 dividend on an annualized basis and a yield of 0.5%. The ex-dividend date of this dividend is Friday, August 15th. Federal Signal's payout ratio is currently 15.60%.

Federal Signal announced that its Board of Directors has approved a share repurchase program on Tuesday, April 22nd that authorizes the company to buyback $150.00 million in shares. This buyback authorization authorizes the conglomerate to purchase up to 3.3% of its shares through open market purchases. Shares buyback programs are often a sign that the company's board believes its stock is undervalued.

Wall Street Analysts Forecast Growth

A number of equities analysts have recently weighed in on the company. CJS Securities restated a "market perform" rating and issued a $125.00 target price on shares of Federal Signal in a research note on Thursday. DA Davidson boosted their target price on Federal Signal from $100.00 to $112.00 and gave the stock a "neutral" rating in a research note on Thursday. Wall Street Zen upgraded Federal Signal from a "hold" rating to a "buy" rating in a research note on Saturday. Raymond James Financial boosted their target price on Federal Signal from $120.00 to $145.00 and gave the stock an "outperform" rating in a research note on Thursday. Finally, KeyCorp restated a "sector weight" rating on shares of Federal Signal in a research note on Friday, July 11th. Three analysts have rated the stock with a hold rating and two have assigned a buy rating to the company's stock. According to MarketBeat, the company has a consensus rating of "Hold" and a consensus price target of $123.00.

Hedge Funds Weigh In On Federal Signal

Institutional investors have recently bought and sold shares of the company. Capital World Investors purchased a new stake in shares of Federal Signal during the fourth quarter worth $79,810,000. Nuveen LLC purchased a new stake in shares of Federal Signal during the first quarter worth $45,307,000. Congress Asset Management Co. purchased a new stake in shares of Federal Signal during the second quarter worth $51,945,000. The Manufacturers Life Insurance Company lifted its position in shares of Federal Signal by 1,266.0% during the first quarter. The Manufacturers Life Insurance Company now owns 464,593 shares of the conglomerate's stock worth $34,171,000 after acquiring an additional 430,583 shares in the last quarter. Finally, Raymond James Financial Inc. purchased a new stake in shares of Federal Signal during the fourth quarter worth $36,636,000. Hedge funds and other institutional investors own 92.73% of the company's stock.

Federal Signal Trading Down 3.2%

The stock has a market cap of $7.45 billion, a PE ratio of 34.12, a P/E/G ratio of 2.18 and a beta of 1.30. The company has a quick ratio of 1.25, a current ratio of 2.60 and a debt-to-equity ratio of 0.20. The firm has a 50-day simple moving average of $105.18 and a 200-day simple moving average of $92.41.

Federal Signal Company Profile

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.