Federal Signal is a designer and manufacturer of products and total solutions that serve municipal, governmental, industrial and commercial customers. The Company operates three groups: Environmental Solutions, Safety and Security Systems and Fire Rescue. The company was founded in 1901 and is based in Oak Brook, Illinois.
FSS Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Federal Signal Corp with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Federal Signal Corp ranked in the 41th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. As for the metrics that stood out in our discounted cash flow analysis of Federal Signal Corp, consider:
The stock's equity weight, or the proportion of capital from equity relative to debt, is 87. Notably, its equity weight is greater than 73.82% of US equities in the Industrials sector yielding a positive free cash flow.
FSS's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 30.85% of tickers in our DCF set.
Federal Signal Corp's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at 18.92. This coverage rate is greater than that of 86.56% of stocks we're observing for the purpose of forecasting via discounted cash flows.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Federal Signal Corp? See ALLE, PXS, INFO, ADT, and BAH.
The Board of Directors of Federal Signal Corporation (NYSE: FSS) declared a quarterly cash dividend of eight cents ($0.08) per share on its common stock. The dividend is payable on September 4, 2020 to stockholders of record at the close of business on August 21, 2020.