Alamo Group, Inc. (ALG) vs Federal Signal Corporation (FSS)

Alamo Group, Inc. and Federal Signal Corporation are both Farm & Heavy Construction Machinery companies. Federal Signal Corporation is the larger, with a market value of $6.9B against $1.9B — 3.5× the size. Alamo Group, Inc. trades at the lower P/E: 19.0× against 24.5×. Federal Signal Corporation grew revenue faster over the last twelve months: 24.0% against 4.07%. Federal Signal Corporation has the higher net margin (11.7% vs 6.08%) and the higher return on invested capital (13.0% vs 7.37%). Both pay a dividend; Federal Signal Corporation yields more (0.50% vs 0.41%). Across the 23 metrics below, Federal Signal Corporation leads on 12 and Alamo Group, Inc. on 11.

Valuation

Metric ALG FSS Farm & Heavy Construction Machinery median
P/E 19.00 24.47 23.38
P/S 1.16 2.85 0.81
P/B 1.62 4.64 1.43
Price to free cash flow 13.90 20.60 25.31
EV/EBITDA 9.68 15.19 12.13
EV/Sales 1.20 3.01 1.20
Earnings yield 5.26% 4.09% 2.73%
Free cash flow yield 7.19% 4.85% 3.02%

Profitability

Metric ALG FSS Farm & Heavy Construction Machinery median
Gross margin 24.21% 29.17% 24.21%
Operating margin 8.91% 16.15% 4.47%
Net margin 6.08% 11.66% 1.49%
Free cash flow margin 8.46% 13.86% 2.15%
Return on equity 8.77% 20.61% 4.16%
Return on assets 6.16% 13.10% 1.45%
Return on invested capital 7.37% 13.02% 3.36%

Growth

Metric ALG FSS Farm & Heavy Construction Machinery median
Revenue growth (TTM) 4.07% 23.97% 2.18%
EPS growth (last fiscal year) (10.80%) 14.57% —
Revenue growth, 5-year CAGR 6.63% 14.03% 7.34%
Net income growth, 5-year CAGR 12.42% 20.72% 0.00%

Health

Metric ALG FSS Farm & Heavy Construction Machinery median
Debt to equity 0.22 0.30 0.67
Current ratio 4.39 2.74 1.98
Net debt to EBITDA (0.50) 1.19 1.12

Dividend

Metric ALG FSS Farm & Heavy Construction Machinery median
Dividend yield 0.41% 0.50% 1.45%
Payout ratio 0.08 0.17 0.08

Size

Metric ALG FSS Farm & Heavy Construction Machinery median
Market cap 1.94b 6.88b 772.81m

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