Is Federal Signal Corporation's (NYSE:FSS) Recent Stock Performance Tethered To Its Strong Fundamentals?
Is Federal Signal Corporation's (NYSE:FSS) Recent Stock Performance Tethered To Its Strong Fundamentals?
Federal Signal (NYSE:FSS) has had a great run on the share market with its stock up by a significant 11% over the last three months. Given that the market rewards strong financials in the long-term, we wonder if that is the case in this instance. In this article, we decided to focus on Federal Signal's ROE.
聯邦信號（紐約證券交易所代碼：FSS）在股票市場上表現良好，其股票在過去三個月中大幅上漲了11％。鑑於從長遠來看，市場會獎勵強勁的財務狀況，我們想知道在這種情況下是否如此。在本文中，我們決定重點關注聯邦信號的投資回報率。
ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders.
投資回報率或股本回報率是評估公司如何有效地從股東那裏獲得投資回報的有用工具。換句話說，它是衡量公司股東提供的資本回報率的盈利比率。
How Is ROE Calculated?
ROE 是如何計算的？
ROE can be calculated by using the formula:
ROE 可以通過以下公式計算：
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
股本回報率 = 淨利潤（來自持續經營業務）÷ 股東權益
So, based on the above formula, the ROE for Federal Signal is:
因此，根據上述公式，聯邦信號的投資回報率爲：
16% = US$157m ÷ US$1.0b (Based on the trailing twelve months to December 2023).
16% = 1.57億美元 ÷ 10億美元（基於截至2023年12月的過去十二個月）。
The 'return' is the income the business earned over the last year. So, this means that for every $1 of its shareholder's investments, the company generates a profit of $0.16.
“回報” 是企業去年獲得的收入。因此，這意味着其股東每投資1美元，公司就會產生0.16美元的利潤。
Why Is ROE Important For Earnings Growth?
爲什麼投資回報率對收益增長很重要？
We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don't share these attributes.
我們已經確定，投資回報率是衡量公司未來收益的有效盈利指標。根據公司選擇將多少利潤進行再投資或 “保留”，我們便能夠評估公司未來創造利潤的能力。一般而言，在其他條件相同的情況下，股本回報率和利潤留存率高的公司的增長率要高於不具有這些屬性的公司。
A Side By Side comparison of Federal Signal's Earnings Growth And 16% ROE
聯邦信號的收益增長和16％的投資回報率的並排比較
To start with, Federal Signal's ROE looks acceptable. On comparing with the average industry ROE of 12% the company's ROE looks pretty remarkable. Probably as a result of this, Federal Signal was able to see a decent growth of 6.9% over the last five years.
首先，聯邦信號的投資回報率似乎是可以接受的。與12％的行業平均投資回報率相比，該公司的投資回報率看起來相當可觀。可能是由於這個原因，聯邦信號在過去五年中得以實現6.9％的可觀增長。
Next, on comparing Federal Signal's net income growth with the industry, we found that the company's reported growth is similar to the industry average growth rate of 7.4% over the last few years.
接下來，在將Federal Signal的淨收入增長與該行業進行比較時，我們發現該公司報告的增長與過去幾年7.4％的行業平均增長率相似。
Earnings growth is an important metric to consider when valuing a stock. It's important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). Doing so will help them establish if the stock's future looks promising or ominous. What is FSS worth today? The intrinsic value infographic in our free research report helps visualize whether FSS is currently mispriced by the market.
收益增長是對股票進行估值時要考慮的重要指標。對於投資者來說，重要的是要知道市場是否對公司的預期收益增長（或下降）進行了定價。這樣做將幫助他們確定股票的未來是樂觀還是不祥的。今天的 FSS 值多少錢？我們的免費研究報告中的內在價值信息圖有助於直觀地了解市場目前是否對FSS進行了錯誤的定價。
Is Federal Signal Efficiently Re-investing Its Profits?
聯邦信號是否有效地將其利潤再投資？
Federal Signal's three-year median payout ratio to shareholders is 20% (implying that it retains 80% of its income), which is on the lower side, so it seems like the management is reinvesting profits heavily to grow its business.
Federal Signal的三年股東派息率中位數爲20％（這意味着它保留了80％的收入），處於較低水平，因此管理層似乎正在大量再投資利潤以發展業務。
Additionally, Federal Signal has paid dividends over a period of at least ten years which means that the company is pretty serious about sharing its profits with shareholders. Existing analyst estimates suggest that the company's future payout ratio is expected to drop to 12% over the next three years. Despite the lower expected payout ratio, the company's ROE is not expected to change by much.
此外，Federal Signal已在至少十年內派發了股息，這意味着該公司非常認真地與股東分享利潤。現有的分析師估計表明，該公司未來的派息率預計將在未來三年降至12％。儘管預期派息率較低，但該公司的投資回報率預計不會有太大變化。
Conclusion
結論
In total, we are pretty happy with Federal Signal's performance. Specifically, we like that the company is reinvesting a huge chunk of its profits at a high rate of return. This of course has caused the company to see substantial growth in its earnings. With that said, the latest industry analyst forecasts reveal that the company's earnings are expected to accelerate. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company.
總的來說，我們對聯邦信號的表現非常滿意。具體而言，我們喜歡該公司以高回報率再投資其利潤的很大一部分。當然，這導致該公司的收益大幅增長。話雖如此，最新的行業分析師預測顯示，該公司的收益有望加速。要詳細了解分析師對公司的最新預測，請查看該公司的分析師預測的可視化。
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