Federal Signal announces dividend and $150M stock buyback

DOWNERS GROVE, Ill. - Federal Signal Corporation (NYSE:FSS), a company specializing in equipment that serves municipal, governmental, industrial, and commercial customers, declared today a quarterly cash dividend of $0.14 per share, representing a yield of 0.77%. The dividend is scheduled to be paid on May 30, 2025, to shareholders on record as of May 16, 2025. According to InvestingPro data, the company has maintained dividend payments for 12 consecutive years, demonstrating a strong commitment to shareholder returns.

In addition to the dividend, the company’s Board of Directors has authorized a new stock repurchase program, allowing for the buyback of up to $150 million of its common stock. This new authorization is supplementary to the existing stock repurchase program from March 2020, which has about $27 million remaining as of the end of the first quarter of 2025. The repurchase initiative comes as the stock has declined 21.17% year-to-date, trading at $73.64 with a market capitalization of $4.5 billion. The repurchase initiative is part of Federal Signal’s strategy to deliver cash returns to shareholders, enhance overall shareholder value, and manage its capital structure effectively.

Jennifer L. Sherman, President and Chief Executive Officer of Federal Signal, expressed the company’s commitment to maximizing shareholder value through these repurchase programs and other initiatives. Sherman highlighted the company’s strong balance sheet, substantial free cash flow generation, and low debt levels as enabling factors for funding stock repurchases and supporting growth investments, including strategic acquisitions. InvestingPro analysis confirms this financial strength with a "GREAT" overall health score of 3.22, while current valuations suggest the stock may be undervalued based on their Fair Value model.

The timing and amount of stock repurchases will be determined by market conditions and other factors, with the company maintaining the flexibility to start, suspend, or discontinue buybacks as circumstances dictate.

This news is based on a press release statement and includes forward-looking statements subject to risks and uncertainties, including economic and geopolitical conditions, regulatory changes, currency exchange fluctuations, competition, supply chain issues, raw material costs, interest rates, and other factors detailed in filings with the Securities and Exchange Commission.

In other recent news, Federal Signal Corporation reported solid financial results for the fourth quarter and full year 2024, with a quarterly revenue of $472 million, marking a 5% increase year-over-year. The company’s adjusted earnings per share (EPS) for the quarter was $0.87, meeting analyst expectations, while their annual net sales reached a record $1.86 billion, an 8% increase from the previous year. Looking ahead, Federal Signal projects 2025 net sales between $2.02 billion and $2.10 billion, with an anticipated adjusted EPS range of $3.60 to $3.90. Meanwhile, DA Davidson has adjusted its price target for Federal Signal, reducing it from $90.00 to $82.00, while maintaining a Neutral rating. The firm cited the company’s current valuation as a factor for this adjustment, despite Federal Signal’s strong track record. The acquisition of Hogg Technologies was highlighted by CEO Jennifer Sherman, who expressed confidence in the company’s growth trajectory. Federal Signal’s strategic moves and financial performance indicate a focus on long-term sustainable growth, with the company expecting continued margin expansion and improvement in pre-tax earnings for 2025.

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