Federal Signal (NYSE:FSS) & Omega Flex (NASDAQ:OFLX) Head to Head Review

Omega Flex (NASDAQ:OFLX) and Federal Signal (NYSE:FSS) are both industrials companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, valuation, profitability and institutional ownership.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Omega Flex	12.27%	14.26%	11.54%
Federal Signal	11.66%	21.36%	13.07%

Institutional & Insider Ownership

36.1% of Omega Flex shares are held by institutional investors. Comparatively, 92.7% of Federal Signal shares are held by institutional investors. 65.2% of Omega Flex shares are held by insiders. Comparatively, 3.3% of Federal Signal shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Omega Flex and Federal Signal”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Omega Flex	$98.30 million	2.76	$14.83 million	$1.19	22.61
Federal Signal	$2.18 billion	3.33	$246.60 million	$4.64	25.64

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

Analyst Ratings

This is a summary of recent ratings and target prices for Omega Flex and Federal Signal, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Omega Flex	1	0	0	0	1.00
Federal Signal	0	2	3	1	2.83

Federal Signal has a consensus target price of $140.50, indicating a potential upside of 18.12%. Given Federal Signal’s stronger consensus rating and higher possible upside, analysts plainly believe Federal Signal is more favorable than Omega Flex.

Dividends

Omega Flex pays an annual dividend of $1.36 per share and has a dividend yield of 5.1%. Federal Signal pays an annual dividend of $0.60 per share and has a dividend yield of 0.5%. Omega Flex pays out 114.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Federal Signal pays out 12.9% of its earnings in the form of a dividend. Omega Flex has increased its dividend for 7 consecutive years and Federal Signal has increased its dividend for 3 consecutive years. Omega Flex is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Omega Flex has a beta of 0.45, indicating that its share price is 55% less volatile than the S&P 500. Comparatively, Federal Signal has a beta of 1.23, indicating that its share price is 23% more volatile than the S&P 500.

Summary

Federal Signal beats Omega Flex on 14 of the 18 factors compared between the two stocks.

About Omega Flex

Omega Flex, Inc., together with its subsidiaries, manufactures and sells flexible metal hoses and accessories in North America and internationally. It offers flexible gas piping for use in residential and commercial buildings; fittings; containment pining; and corrugated medical tubing for use in hospitals, ambulatory care centers, dental, physician and veterinary clinics, laboratories, and other facilities. The company sells its products under the TracPipe, CounterStrike, AutoSnap, AutoFlare, DoubleTrac, DEF-Trac, and MediTrac brand names. It serves various markets, including construction, manufacturing, transportation, petrochemical, pharmaceutical, and other industries. The company sells its products through independent sales representatives, distributors, fabricating distributors, wholesalers, original equipment manufacturers, and direct sales, as well as through its website. The company was formerly known as Tofle America, Inc. and changed its name to Omega Flex, Inc. in 1996. Omega Flex, Inc. was incorporated in 1975 and is based in Exton, Pennsylvania.

About Federal Signal

Federal Signal Corp. engages in the design and manufacture of products and integrated solutions for municipal, governmental, industrial, and commercial customers. It operates through the Environmental Solutions Group and Safety and Security Systems Group segments. The Environment Solutions Group segment is involved in the manufacture and supply of street sweeper vehicles, sewer cleaners, vacuum loader trucks, hydro-excavation trucks, and water blasting equipment. The Safety and Security Systems Group segment offers comprehensive systems and products that law enforcement, fire rescue, emergency medical services, campuses, military facilities, and industrial sites use to protect people and property. The company was founded in 1901 and is headquartered in Oak Brook, IL.