Caterpillar Inc. (CAT) vs Federal Signal Corporation (FSS)

Caterpillar Inc. and Federal Signal Corporation are both Farm & Heavy Construction Machinery companies. Caterpillar Inc. is the larger, with a market value of $254.5B against $6.8B — 37.2× the size. Caterpillar Inc. trades at the lower P/E: 21.7× against 23.0×. Federal Signal Corporation grew revenue faster over the last twelve months: 24.0% against 20.3%. Caterpillar Inc. has the higher net margin (15.2% vs 11.7%) and the higher return on invested capital (15.2% vs 13.4%). Both pay a dividend; Caterpillar Inc. yields more (1.13% vs 0.53%). Across the 23 metrics below, Federal Signal Corporation leads on 14 and Caterpillar Inc. on 9.

Valuation

Metric CAT FSS Farm & Heavy Construction Machinery median
P/E 21.67 23.02 21.67
P/S 3.28 2.69 0.77
P/B 11.86 4.34 1.31
Price to free cash flow 24.14 18.75 20.59
EV/EBITDA 17.31 14.16 11.30
EV/Sales 3.76 2.82 1.11
Earnings yield 4.61% 4.34% 3.08%
Free cash flow yield 4.14% 5.33% 3.12%

Profitability

Metric CAT FSS Farm & Heavy Construction Machinery median
Gross margin 34.78% 29.10% 22.91%
Operating margin 20.18% 16.20% 4.47%
Net margin 15.21% 11.65% 1.41%
Free cash flow margin 13.57% 14.33% 2.26%
Return on equity 56.15% 20.47% 3.99%
Return on assets 11.80% 13.52% 1.31%
Return on invested capital 15.16% 13.40% 4.09%

Growth

Metric CAT FSS Farm & Heavy Construction Machinery median
Revenue growth (TTM) 20.26% 23.99% 1.81%
EPS growth (last fiscal year) (14.69%) 14.57% (27.79%)
Revenue growth, 5-year CAGR 10.12% 14.03% 6.63%
Net income growth, 5-year CAGR 24.27% 20.72% 0.00%

Health

Metric CAT FSS Farm & Heavy Construction Machinery median
Debt to equity 2.10 0.27 0.66
Current ratio 1.42 2.97 1.98
Net debt to EBITDA 2.26 1.19 1.12

Dividend

Metric CAT FSS Farm & Heavy Construction Machinery median
Dividend yield 1.13% 0.53% 1.24%
Payout ratio 0.25 0.12 0.31

Size

Metric CAT FSS Farm & Heavy Construction Machinery median
Market cap 254.49b 6.84b 836.63m

Compare with another peer

Any metric, up to five companies and an Excel export Powerpack