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FELE

Franklin Electric NasdaqGS:FELE Stock Report

Last Price

US$85.50

Market Cap

US$4.0b

7D

2.7%

1Y

3.3%

Updated

05 Oct, 2022

Data

Company Financials +
FELE fundamental analysis
Snowflake Score
Valuation3/6
Future Growth1/6
Past Performance5/6
Financial Health5/6
Dividends3/6

FELE Stock Overview

Franklin Electric Co., Inc., together with its subsidiaries, designs, manufactures, and distributes water and fuel pumping systems worldwide.

Franklin Electric Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Franklin Electric
Historical stock prices
Current Share PriceUS$85.50
52 Week HighUS$96.95
52 Week LowUS$68.27
Beta1.06
1 Month Change-0.34%
3 Month Change13.08%
1 Year Change3.26%
3 Year Change88.53%
5 Year Change90.42%
Change since IPO7,947.06%

Recent News & Updates

Sep 26
Investors Will Want Franklin Electric's (NASDAQ:FELE) Growth In ROCE To Persist

Investors Will Want Franklin Electric's (NASDAQ:FELE) Growth In ROCE To Persist

If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. One common...

Sep 20

Franklin Electric: Potential Slowdown In Housing And Agriculture Keeps Us On The Sidelines

Summary The company’s revenue should benefit from improvement in supply chain constraints and higher price realization. With improvement in supply chain issues, transportation and manufacturing costs should reduce, benefiting margins. However, uncertainty in housing and agriculture end markets keeps us on the sidelines. Investment Thesis I previously covered Franklin Electric (FELE) a couple of months back where I talked about elevated backlog and pricing action helping the company's near-term revenues and margins. However, I was concerned about medium-term headwinds in the housing and agriculture end market. FELE reported its second-quarter earnings after our previous article and the stock performed well as it posted good revenue growth and margin improvement. Franklin Electric is experiencing healthy demand for its water systems and fueling systems. The supply chain constraints are improving along with the lead times for electronic components and the company was able to convert more of its backlog into revenue in the last quarter. The improvement in supply chain constraints, healthy demand, and higher price realization should drive revenue and margin growth in 2H FY22. However, medium-term concerns around a potential slowdown in housing and agriculture still remain. Hence I have a neutral rating on the stock. Revenue Outlook For FELE The near-term demand across all three business segments of FELE has been strong, reflecting the growing need for its Water and Fueling system products. The backlog in the last quarter was approximately $290 million, flattish sequentially compared to the first quarter. The pricing actions taken by the company to offset inflation and volume growth from strong demand is benefiting the company's sales. About two-thirds of the organic growth in Q2 FY22 was driven by price increases. In the Water Systems segment, the demand is strong across all major product lines such as groundwater pumping, surface pumping, dewatering equipment, and water treatment. The groundwater pumping business grew 38% Y/Y last quarter, whereas all surface pumping equipment businesses grew 29% Y/Y. The end market is driven by dry weather conditions in the U.S. and other regions in the world and food scarcity in the agriculture business, whereas the population migration to rural areas in the U.S. post-Covid is driving growth in the residential business. On the inorganic side, the integration of Puronics and Aqua Systems is moving forward as per the company's plan. In the Fueling systems segment, the robust demand for infrastructure build-out in the U.S. is driving the growth. As the major oil marketers invest in new locations and industry consolidation progresses, the demand for fueling systems should rise in the U.S. and other parts of the world. Outside the U.S., the greater focus on vapor recovery, environmental management, and monitoring should drive demand. The geopolitical tensions have highlighted the need for expansion of agriculture, mining, and energy infrastructure as pressure from recent conflict impacted the food, material, and energy supplies which is driving the demand for Water and Fueling systems of FELE. The strong demand in the market has led to supply chain constraints in the market earlier this year. However, these issues are now moderating. This could be seen in the company's backlog numbers, which were flattish compared to the prior quarter despite strong demand as the company was able to convert more of its backlog into revenues. Even though the lead times are at higher levels for the electronic components, it is improving sequentially. I believe, supply chain constraints should further ease in 2H FY22, benefiting the company sales. Over the last couple of years, the company has also benefited from rural migration. The installed base of wells in the U.S. is approximately 13 million to 14 million and with more people moving towards the rural setting, these wells were getting utilized more. This resulted in more wear out the systems in these wells, benefiting FELE's Water systems segment in recent years. The healthy demand in the end market and improvement in supply chain constraints should drive the growth in 2H FY22. Last quarter, the company has raised its revenue guidance range from $1.9 billion to $2.05 billion to $2 billion to $2.15 billion for FY22, helped by these strong near-term demand trends. However, I am worried when it comes to the company's medium-term prospects. As the Covid pandemic is now over and in-office work is getting started, the rural migration trend which benefited FELE might reverse. Also, the housing end market is weakening with rising interest rates. Further, Agri commodities prices have corrected meaningfully over the last couple of months. This might impact the company's sales in the agriculture end market in the medium term. So, while the company may see good growth in the near term on the back of a strong backlog and price increase, I see a good probability of a slowdown in sales growth from the next year onwards. Margins Even though the company has been able to offset higher inflationary costs through price hikes, supply chain disruptions, and higher transportation and manufacturing costs are impacting gross margins which declined 50 bps last quarter. The company is trying to cover these costs through growth and operating leverage. The operating environment for the company improved sequentially last quarter with the moderation in supply chain challenges. As a result, the adjusted operating margin in Q2 FY22 improved 290 bps Y/Y to 14.7%, driven by leverage on fixed costs through higher sales, price realization, and cost management. Looking forward, I believe the improvement in supply chain challenges should drive the margin growth in 2H FY22 along with higher price realization. Beyond FY22, in the medium term, I expect margins to stabilize around 2H22 levels.

Sep 11
Is It Too Late To Consider Buying Franklin Electric Co., Inc. (NASDAQ:FELE)?

Is It Too Late To Consider Buying Franklin Electric Co., Inc. (NASDAQ:FELE)?

Franklin Electric Co., Inc. ( NASDAQ:FELE ), might not be a large cap stock, but it received a lot of attention from a...

Aug 29
These 4 Measures Indicate That Franklin Electric (NASDAQ:FELE) Is Using Debt Safely

These 4 Measures Indicate That Franklin Electric (NASDAQ:FELE) Is Using Debt Safely

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the...

Shareholder Returns

FELEUS MachineryUS Market
7D2.7%7.9%4.4%
1Y3.3%-12.5%-18.2%

Return vs Industry: FELE exceeded the US Machinery industry which returned -12.5% over the past year.

Return vs Market: FELE exceeded the US Market which returned -18.2% over the past year.

Price Volatility

Is FELE's price volatile compared to industry and market?
FELE volatility
FELE Average Weekly Movement4.1%
Machinery Industry Average Movement5.4%
Market Average Movement6.9%
10% most volatile stocks in US Market15.5%
10% least volatile stocks in US Market2.8%

Stable Share Price: FELE is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: FELE's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19446,400Gregg Sengstackhttps://www.franklin-electric.com

Franklin Electric Co., Inc., together with its subsidiaries, designs, manufactures, and distributes water and fuel pumping systems worldwide. It operates through three segments: Water Systems, Fueling Systems, and Distribution. The Water Systems segment offers submersible motors, pumps, drives, electronic controls, water treatment systems, monitoring devices, and related parts and equipment.

Franklin Electric Fundamentals Summary

How do Franklin Electric's earnings and revenue compare to its market cap?
FELE fundamental statistics
Market CapUS$3.96b
Earnings (TTM)US$175.07m
Revenue (TTM)US$1.89b

22.6x

P/E Ratio

2.1x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
FELE income statement (TTM)
RevenueUS$1.89b
Cost of RevenueUS$1.25b
Gross ProfitUS$642.93m
Other ExpensesUS$467.86m
EarningsUS$175.07m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)3.78
Gross Margin33.94%
Net Profit Margin9.24%
Debt/Equity Ratio31.6%

How did FELE perform over the long term?

See historical performance and comparison

Dividends

0.9%

Current Dividend Yield

20%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is FELE undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for FELE?

Other financial metrics that can be useful for relative valuation.

FELE key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue2.3x
Enterprise Value/EBITDA16.2x
PEG Ratio4.5x

Price to Earnings Ratio vs Peers

How does FELE's PE Ratio compare to its peers?

FELE PE Ratio vs Peers
The above table shows the PE ratio for FELE vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average28.3x
WTS Watts Water Technologies
20.7x-0.3%US$4.4b
AQUA Evoqua Water Technologies
74.5x25.6%US$4.3b
MLI Mueller Industries
5.3xn/aUS$3.5b
TKR Timken
12.8x9.2%US$4.8b
FELE Franklin Electric
22.6x5.1%US$4.0b

Price-To-Earnings vs Peers: FELE is good value based on its Price-To-Earnings Ratio (22.6x) compared to the peer average (28.3x).


Price to Earnings Ratio vs Industry

How does FELE's PE Ratio compare vs other companies in the US Machinery Industry?

Price-To-Earnings vs Industry: FELE is expensive based on its Price-To-Earnings Ratio (22.6x) compared to the US Machinery industry average (19.3x)


Price to Earnings Ratio vs Fair Ratio

What is FELE's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

FELE PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio22.6x
Fair PE Ratio16.4x

Price-To-Earnings vs Fair Ratio: FELE is expensive based on its Price-To-Earnings Ratio (22.6x) compared to the estimated Fair Price-To-Earnings Ratio (16.4x).


Share Price vs Fair Value

What is the Fair Price of FELE when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: FELE ($85.5) is trading below our estimate of fair value ($173.1)

Significantly Below Fair Value: FELE is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.


Discover undervalued companies

Future Growth

How is Franklin Electric forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


5.1%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FELE's forecast earnings growth (5.1% per year) is above the savings rate (1.9%).

Earnings vs Market: FELE's earnings (5.1% per year) are forecast to grow slower than the US market (14.8% per year).

High Growth Earnings: FELE's earnings are forecast to grow, but not significantly.

Revenue vs Market: FELE's revenue (4% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: FELE's revenue (4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if FELE's Return on Equity is forecast to be high in 3 years time


Discover growth companies

Past Performance

How has Franklin Electric performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


14.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: FELE has high quality earnings.

Growing Profit Margin: FELE's current net profit margins (9.2%) are higher than last year (9.1%).


Past Earnings Growth Analysis

Earnings Trend: FELE's earnings have grown by 14% per year over the past 5 years.

Accelerating Growth: FELE's earnings growth over the past year (33.3%) exceeds its 5-year average (14% per year).

Earnings vs Industry: FELE earnings growth over the past year (33.3%) exceeded the Machinery industry 9.8%.


Return on Equity

High ROE: FELE's Return on Equity (17.9%) is considered low.


Discover strong past performing companies

Financial Health

How is Franklin Electric's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: FELE's short term assets ($913.2M) exceed its short term liabilities ($539.5M).

Long Term Liabilities: FELE's short term assets ($913.2M) exceed its long term liabilities ($223.2M).


Debt to Equity History and Analysis

Debt Level: FELE's net debt to equity ratio (28.3%) is considered satisfactory.

Reducing Debt: FELE's debt to equity ratio has reduced from 40.2% to 31.6% over the past 5 years.

Debt Coverage: FELE's debt is not well covered by operating cash flow (10.1%).

Interest Coverage: FELE's interest payments on its debt are well covered by EBIT (30.2x coverage).


Balance Sheet


Discover healthy companies

Dividend

What is Franklin Electric current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


0.91%

Current Dividend Yield

Dividend Yield vs Market

Franklin Electric Dividend Yield vs Market
How does Franklin Electric dividend yield compare to the market?
SegmentDividend Yield
Company (Franklin Electric)0.9%
Market Bottom 25% (US)1.6%
Market Top 25% (US)4.5%
Industry Average (Machinery)1.9%
Analyst forecast in 3 Years (Franklin Electric)0.9%

Notable Dividend: FELE's dividend (0.91%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.6%).

High Dividend: FELE's dividend (0.91%) is low compared to the top 25% of dividend payers in the US market (4.53%).


Stability and Growth of Payments

Stable Dividend: FELE's dividends per share have been stable in the past 10 years.

Growing Dividend: FELE's dividend payments have increased over the past 10 years.


Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (19.6%), FELE's dividend payments are well covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: FELE is paying a dividend but the company has no free cash flows.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

5.5yrs

Average management tenure


CEO

Gregg Sengstack (64 yo)

8.42yrs

Tenure

US$6,896,933

Compensation

Mr. Gregg C. Sengstack has been the Chief Executive Officer of Franklin Electric Co., Inc. since May 2, 2014 and has been its Chairman since May 8, 2015. He serves as President at Franklin Electric Co., In...


CEO Compensation Analysis

Gregg Sengstack's Compensation vs Franklin Electric Earnings
How has Gregg Sengstack's remuneration changed compared to Franklin Electric's earnings?
DateTotal Comp.SalaryCompany Earnings
Jun 30 2022n/an/a

US$175m

Mar 31 2022n/an/a

US$155m

Dec 31 2021US$7mUS$870k

US$153m

Sep 30 2021n/an/a

US$139m

Jun 30 2021n/an/a

US$131m

Mar 31 2021n/an/a

US$117m

Dec 31 2020US$6mUS$824k

US$100m

Sep 30 2020n/an/a

US$93m

Jun 30 2020n/an/a

US$88m

Mar 31 2020n/an/a

US$96m

Dec 31 2019US$6mUS$798k

US$95m

Sep 30 2019n/an/a

US$99m

Jun 30 2019n/an/a

US$95m

Mar 31 2019n/an/a

US$93m

Dec 31 2018US$5mUS$765k

US$105m

Sep 30 2018n/an/a

US$89m

Jun 30 2018n/an/a

US$84m

Mar 31 2018n/an/a

US$83m

Dec 31 2017US$5mUS$730k

US$78m

Sep 30 2017n/an/a

US$87m

Jun 30 2017n/an/a

US$86m

Mar 31 2017n/an/a

US$80m

Dec 31 2016US$4mUS$694k

US$77m

Oct 01 2016n/an/a

US$75m

Jul 02 2016n/an/a

US$72m

Apr 02 2016n/an/a

US$65m

Jan 02 2016US$3mUS$669k

US$71m

Compensation vs Market: Gregg's total compensation ($USD6.90M) is about average for companies of similar size in the US market ($USD6.80M).

Compensation vs Earnings: Gregg's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: FELE's management team is seasoned and experienced (5.5 years average tenure).


Board Members

Experienced Board: FELE's board of directors are considered experienced (4.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: FELE insiders have only sold shares in the past 3 months.


Recent Insider Transactions

NasdaqGS:FELE Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
23 Aug 22SellUS$133,744Jonathan GrandonIndividual1,464US$91.36
18 Aug 22SellUS$1,900,300Gregg SengstackIndividual20,000US$95.46
18 Aug 22SellUS$145,401Jonathan GrandonIndividual1,536US$94.66
16 Aug 22SellUS$475,430Donald KenneyIndividual5,000US$95.51
29 Jul 22SellUS$2,297,506Gregg SengstackIndividual26,000US$89.56
09 May 22BuyUS$140,716Jeffery TaylorIndividual2,000US$70.36
25 Feb 22SellUS$262,298DeLancey DavisIndividual3,075US$85.30
02 Nov 21SellUS$606,919Gregg SengstackIndividual6,871US$88.33
02 Nov 21SellUS$77,308Jonathan GrandonIndividual872US$88.66
29 Oct 21SellUS$583,537Gregg SengstackIndividual6,782US$86.04

Ownership Breakdown

What is the ownership structure of FELE?
Owner TypeNumber of SharesOwnership Percentage
Public Companies2,5710.006%
General Public936,3242.0%
Individual Insiders7,548,66716.3%
Institutions37,804,15681.7%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Top 25 shareholders own 80.35% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
16.91%
BlackRock, Inc.
7,828,666$669.4m-0.93%0.02%
9.79%
The Vanguard Group, Inc.
4,533,305$387.6m-0.42%0.01%
8.64%
Patricia Schaefer
4,000,168$342.0m0%no data
6.53%
Diane Humphrey
3,023,103$258.5m0%no data
5.79%
State Street Global Advisors, Inc.
2,679,097$229.1m18.66%0.01%
5.08%
EARNEST Partners, LLC
2,351,955$201.1m-2.69%1.3%
4.61%
Allspring Global Investments, LLC
2,133,506$182.4m0.23%0.28%
2.58%
Luther King Capital Management Corporation
1,192,407$102.0m-0.4%0.58%
2.37%
Dimensional Fund Advisors LP
1,094,905$93.6m-1.1%0.02%
2.14%
Impax Asset Management Group plc
991,250$84.8m-4.44%0.27%
1.66%
Allianz Asset Management AG
766,724$65.6m-4.39%0.06%
1.62%
Geode Capital Management, LLC
748,840$64.0m-1.11%0.01%
1.17%
Invesco Capital Management LLC
540,025$46.2m-8.58%0.04%
1.13%
BNPP Asset Management France
523,236$44.7m0%0.15%
1.1%
Vaughan Nelson Investment Management, L.P.
508,865$43.5m0%0.59%
1.06%
Managed Account Advisors LLC
491,141$42.0m1.71%0.01%
1.06%
Northern Trust Global Investments
490,405$41.9m-2.37%0.01%
1.01%
GAMCO Investors, Inc.
469,539$40.1m-0.26%0.17%
0.92%
Norges Bank Investment Management
427,261$36.5m0%no data
0.92%
BNY Mellon Asset Management
423,820$36.2m-2.16%0.01%
0.91%
New York State Common Retirement Fund
420,841$36.0m-0.73%0.05%
0.88%
Charles Schwab Investment Management, Inc.
408,183$34.9m2.98%0.01%
0.85%
Gregg Sengstack
394,168$33.7m-11.06%no data
0.84%
First Trust Advisors LP
389,994$33.3m6.97%0.04%
0.78%
Boston Trust Walden Company
362,394$31.0m0.85%0.29%

Company Information

Franklin Electric Co., Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Franklin Electric Co., Inc.
  • Ticker: FELE
  • Exchange: NasdaqGS
  • Founded: 1944
  • Industry: Industrial Machinery
  • Sector: Capital Goods
  • Implied Market Cap: US$3.958b
  • Shares outstanding: 46.29m
  • Website: https://www.franklin-electric.com

Number of Employees


Location

  • Franklin Electric Co., Inc.
  • 9255 Coverdale Road
  • Fort Wayne
  • Indiana
  • 46809
  • United States


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FELENasdaqGS (Nasdaq Global Select)YesCommon SharesUSUSDJan 1980
FE4DB (Deutsche Boerse AG)YesCommon SharesDEEURJan 1980

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/10/05 00:00
End of Day Share Price2022/10/05 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.