Quality Investor

Federal Signal Corporation

Rank #262Capital ReturnWatchlistCompare with other stocks

FSS · NYSE · Industrials

Federal Signal Corporation (FSS) — Rank #262 by gross profitability (GP/assets 0.26) · ROE 16.4% · Piotroski F-Score N/A.

As-of 2026-10-30 · CIK 0000277509 · all metrics point-in-time as of the filing date.

About

Federal Signal Corporation 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.

Show more

It operates through two segments, Environmental Solutions Group, and Safety and Security Systems Group. The company offers street sweepers, sewer cleaners, industrial vacuum loaders, safe-digging trucks, dump truck bodies, and trailers, as well as waterblasting, road-marking, line-removal, metal extraction support equipment, and multi-purpose maintenance vehicles under the ELGIN, VACTOR, GUZZLER, TRUVAC, WESTECH, JETSTREAM, BLASTERS, MARK RITE LINES, HOG, NEW WAY, TRACKLESS, OX BODIES, CRYSTEEL, J-CRAFT, DURACLASS, RUGBY, TRAVIS, OSW, NTE, WTB, GROUND FORCE, TOWHAUL, BUCKS, AND SWITCH-N-GO brands; and provides refuse and recycling collection vehicles through a dealer network or direct sales to service customers. It is also involved in sale of parts, service and repair, equipment rentals, and training. The company also provides systems for community alerting, emergency vehicles, first responder interoperable communications, and industrial communications; public safety equipment, such as vehicle lightbars and sirens, industrial signaling equipment, public warning systems, and general alarm/public address systems under the Federal Signal, Federal Signal VAMA, and Victor brand names through wholesalers, distributors, independent manufacturer representatives, original equipment manufacturers, and direct sales force, as well as independent foreign distributors.

Federal Signal Corporation was founded in 1901 and is based in Downers Grove, Illinois.

Industry
Farm & Heavy Construction Machinery
Sector
Industrials
State
DE
Filer Category
Large accelerated filer
Fiscal Year End
December 31

Company Snapshot

P/E and reverse DCF are the primary valuation lenses at this stage.

Market Cap

—

P/E (annual)

—

P/S (annual)

—

P/B

—

P/OCF (annual)

—

Shareholder Yield

—

Employees

5,800

Industry

Farm & Heavy Construction Machinery

Exchange

NYSE

12/12

Flags passed

FSS passes 12/12 quality flags

  • PASS
    Gross margin holding
  • PASS
    Dilution within 2%
  • PASS
    FCF not negative from investment
  • PASS
    Disclosure consistent
  • PASS
    Revenue not declining
  • PASS
    Operating margin holding
  • PASS
    Free cash flow intact
  • PASS
    Passes safety gate
  • PASS
    Balance sheet stable
  • PASS
    No competitive retreat
  • PASS
    SBC not compressing margin
  • PASS
    No valuation convergence

Strengths Revenue growth accelerating · Operating leverage expanding · Deferred revenue growing · Sequential beat (rev + EPS)

A count of the 12 warning flags that could be evaluated. Unweighted: colour follows the worst flag.

Quality Profile

Profitability

1/1 pass
GP / assets
0.26
Return on equity
16.4%
Gross margin trend
PASS

Safety

1/1 pass
Balance-sheet safety
PASS
Debt / equity
0.62
Current ratio
2.74×
Net cash
-$148.80M

Cash Flow

2/3 pass
Positive FCF
PASS
Cash-backed earnings
WARN
Accruals healthy
PASS
SBC / revenue
0.7%

Growth

2/2 pass
Revenue growth
17.1%
Piotroski F-Score
N/A
Share dilution
-0.3%

FCF yield, shareholder yield, and buyback activity are the primary reads at this stage.

Profitability

Does it make money well?

No warning flags · GP/assets 75th percentile of 21 SIC 37 peers

Gross profitability (GP / assets)

0.26

Primary signal (Novy-Marx).

75th pctl of 21 SIC 37 peers

Return on equity

16.4%

Gross margin

28.9%

65th pctl of 21 SIC 37 peers

Revenue growth (YoY)

17.1%

Gross margin improving

Margin trend vs prior year.

PASS

Operating Leverage

2022202320242025
Revenue vs COGS
Revenue vs OpEx
Op. Income vs Revenue

Growth

Revenue CAGR (3Y)

15.0%

Revenue CAGR (5Y)

14.0%

Earnings CAGR (3Y)

27.0%

FCF CAGR (3Y)

—

Cash Flow Health

Is the cash real?

No warning flags · FCF 8% below net income

Free cash flow

$227.10M

Operating cash flow minus capex.

Positive free cash flow

PASS

FCF vs net income

-7.9%

(FCF − net income) ÷ |net income|. Positive: cash above earnings. Negative: below.

FCF not below net income

Fails when free cash flow is below net income (yellow flag).

WARN

Accruals healthy

Cash-backed earnings.

PASS

SBC / revenue

0.7%

Stock-based comp intensity.

Balance Sheet Strength

Can it survive a storm?

No warning flags · net debt $148.80M

Balance-sheet safety

Composite anti-fragile check.

PASS

Debt / equity

0.62

79th pctl of 20 SIC 37 peers (best = lowest)

Current ratio

2.74×

80th pctl of 21 SIC 37 peers

Quick ratio

1.12×

Net cash

-$148.80M

Cash & equivalents minus total debt.

Piotroski F-Score

N/A

Only 8/9 components determinable.

Valuation

Is the price reasonable?

No warning flags

Dividend safety

Composite score

4.0 / 5

Strong
Payout ratio
13.8%5/5 Strong
FCF coverage
6.66×5/5 Strong
Dividend growth streak
3 yr2/5 Fair
Balance-sheet health
D/E 0.62 · IC 24.18×4/5 Strong

Capital allocation quality

Composite score

2.7 / 5

Fair
Share count trend(net buybacks)
-0.3%3/5 Good
Buyback timing
N/AN/A
Dividend growth consistency
3 yr2/5 Fair
Net debt trajectory
-0.4%3/5 Good

Lifecycle Phase History

20202025
Decline
Capital Return
Op. Leverage