Westinghouse Air Brake Technologies (NYSE:WAB) and Federal Signal (NYSE:FSS) are both transportation companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, risk, valuation, dividends and earnings.
Analyst Ratings
This is a breakdown of recent ratings for Westinghouse Air Brake Technologies and Federal Signal, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Westinghouse Air Brake Technologies | 0 | 2 | 5 | 0 | 2.71 |
Federal Signal | 0 | 2 | 2 | 0 | 2.50 |
Westinghouse Air Brake Technologies presently has a consensus price target of $83.3333, indicating a potential upside of 3.38%. Federal Signal has a consensus price target of $37.00, indicating a potential downside of 6.66%. Given Westinghouse Air Brake Technologies' stronger consensus rating and higher probable upside, research analysts plainly believe Westinghouse Air Brake Technologies is more favorable than Federal Signal.
Valuation & Earnings
This table compares Westinghouse Air Brake Technologies and Federal Signal's gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Westinghouse Air Brake Technologies | $8.20 billion | 1.86 | $326.70 million | $4.17 | 19.33 |
Federal Signal | $1.22 billion | 1.96 | $108.50 million | $1.79 | 22.15 |
Westinghouse Air Brake Technologies has higher revenue and earnings than Federal Signal. Westinghouse Air Brake Technologies is trading at a lower price-to-earnings ratio than Federal Signal, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Westinghouse Air Brake Technologies and Federal Signal's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Westinghouse Air Brake Technologies | 5.29% | 7.60% | 3.99% |
Federal Signal | 8.68% | 16.12% | 8.72% |
Volatility & Risk
Westinghouse Air Brake Technologies has a beta of 1.53, meaning that its share price is 53% more volatile than the S&P 500. Comparatively, Federal Signal has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500.
Dividends
Westinghouse Air Brake Technologies pays an annual dividend of $0.48 per share and has a dividend yield of 0.6%. Federal Signal pays an annual dividend of $0.36 per share and has a dividend yield of 0.9%. Westinghouse Air Brake Technologies pays out 11.5% of its earnings in the form of a dividend. Federal Signal pays out 20.1% 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. Westinghouse Air Brake Technologies has increased its dividend for 1 consecutive years and Federal Signal has increased its dividend for 1 consecutive years.
Institutional and Insider Ownership
88.1% of Westinghouse Air Brake Technologies shares are held by institutional investors. Comparatively, 87.6% of Federal Signal shares are held by institutional investors. 5.4% of Westinghouse Air Brake Technologies shares are held by insiders. Comparatively, 3.9% of Federal Signal shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Summary
Westinghouse Air Brake Technologies beats Federal Signal on 11 of the 16 factors compared between the two stocks.