Critical Contrast: NIO (NIO) versus Federal Signal (FSS)

Federal Signal (NYSE:FSS) and NIO (NYSE:NIO) are both multi-sector conglomerates companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, dividends, institutional ownership, risk, profitability, analyst recommendations and valuation.

Profitability

This table compares Federal Signal and NIO’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Federal Signal 8.85% 17.57% 8.88%
NIO N/A N/A N/A

Valuation and Earnings

This table compares Federal Signal and NIO’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Federal Signal $1.09 billion 1.35 $94.00 million $1.43 17.03
NIO $720.12 million 5.50 -$1.40 billion ($10.21) -0.38

Federal Signal has higher revenue and earnings than NIO. NIO is trading at a lower price-to-earnings ratio than Federal Signal, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

89.2% of Federal Signal shares are held by institutional investors. Comparatively, 21.7% of NIO shares are held by institutional investors. 4.0% of Federal Signal shares are held by insiders. Comparatively, 1.0% of NIO shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Federal Signal pays an annual dividend of $0.32 per share and has a dividend yield of 1.3%. NIO does not pay a dividend. Federal Signal pays out 22.4% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of current recommendations and price targets for Federal Signal and NIO, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Federal Signal 0 0 0 0 N/A
NIO 2 3 6 0 2.36

NIO has a consensus price target of $7.77, indicating a potential upside of 101.30%. Given NIO’s higher possible upside, analysts clearly believe NIO is more favorable than Federal Signal.

Summary

Federal Signal beats NIO on 10 of the 14 factors compared between the two stocks.

Federal Signal Company Profile

Federal Signal Corporation, together with its subsidiaries, designs, manufactures, and supplies a suite of products and integrated solutions for municipal, governmental, industrial, and commercial customers in the United States, Canada, Europe, and internationally. It operates through two segments, Environmental Solutions Group and Safety and Security Systems Group. The Environmental Solutions Group segment offers a range of street sweeper vehicles, sewer cleaner and vacuum loader trucks, hydro-excavation trucks, and water blasting equipment under the Elgin, Vactor, Guzzler, Westech, and Jetstream brand names. Is also manufactures dump truck bodies and trailers for maintenance and infrastructure end-markets under the Ox Bodies, Crysteel, J-Craft, Duraclass, Rugby, and Travis brand names. In addition, this segment engages in the sale of parts, service and repair, equipment rental, and training activities under the FS Solutions brand. The Safety and Security Systems Group segment provides systems and products for campus and community alerting, emergency vehicles, first responder interoperable communications, and industrial communications, as well as command and municipal networked security. Its products include vehicle lightbars and sirens, public warning sirens, general alarm systems, public address systems, and public safety software. This segment sells its products under the Federal Signal, Federal Signal VAMA, and Victor brand names. The company sells its products through wholesaler, distributor, independent manufacturer representative, original equipment manufacturer, and direct sales force, as well as independent foreign distributor. Federal Signal Corporation was founded in 1901 and is headquartered in Oak Brook, Illinois.

NIO Company Profile

NIO Inc. designs, manufactures, and sells electric vehicles in the People's Republic of China. The company is also involved in the manufacture of e-powertrain, battery packs, and components; and racing management, technology development, and sales and after-sales management activities. In addition, it offers power solutions for battery charging needs; and other value-added services. The company was formerly known as NextEV Inc. and changed its name to NIO Inc. in July 2017. NIO Inc. was founded in 2014 and is headquartered in Shanghai, the People's Republic of China.

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