| Snowflake Score | |
|---|---|
| Valuation | 3/6 |
| Future Growth | 1/6 |
| Past Performance | 5/6 |
| Financial Health | 5/6 |
| Dividends | 3/6 |
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
| Historical stock prices | |
|---|---|
| Current Share Price | US$85.50 |
| 52 Week High | US$96.95 |
| 52 Week Low | US$68.27 |
| Beta | 1.06 |
| 1 Month Change | -0.34% |
| 3 Month Change | 13.08% |
| 1 Year Change | 3.26% |
| 3 Year Change | 88.53% |
| 5 Year Change | 90.42% |
| Change since IPO | 7,947.06% |
Recent News & Updates
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...
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.
Is It Too Late To Consider Buying Franklin Electric Co., Inc. (NASDAQ:FELE)?
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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
| FELE | US Machinery | US Market | |
|---|---|---|---|
| 7D | 2.7% | 7.9% | 4.4% |
| 1Y | 3.3% | -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
| FELE volatility | |
|---|---|
| FELE Average Weekly Movement | 4.1% |
| Machinery Industry Average Movement | 5.4% |
| Market Average Movement | 6.9% |
| 10% most volatile stocks in US Market | 15.5% |
| 10% least volatile stocks in US Market | 2.8% |
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
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1944 | 6,400 | Gregg Sengstack | https://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
| FELE fundamental statistics | |
|---|---|
| Market Cap | US$3.96b |
| Earnings (TTM) | US$175.07m |
| Revenue (TTM) | US$1.89b |
22.6x
P/E Ratio2.1x
P/S RatioIs FELE overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| FELE income statement (TTM) | |
|---|---|
| Revenue | US$1.89b |
| Cost of Revenue | US$1.25b |
| Gross Profit | US$642.93m |
| Other Expenses | US$467.86m |
| Earnings | US$175.07m |
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
n/a
| Earnings per share (EPS) | 3.78 |
| Gross Margin | 33.94% |
| Net Profit Margin | 9.24% |
| Debt/Equity Ratio | 31.6% |
How did FELE perform over the long term?
See historical performance and comparisonDividends
0.9%
Current Dividend Yield20%
Payout RatioValuation
Is FELE undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score
3/6Valuation 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.
| What is FELE's n/a Ratio? | |
|---|---|
| n/a Ratio | 0x |
| n/a | n/a |
| Market Cap | US$3.96b |
| Key Statistics | |
|---|---|
| Enterprise Value/Revenue | 2.3x |
| Enterprise Value/EBITDA | 16.2x |
| PEG Ratio | 4.5x |
Price to Earnings Ratio vs Peers
How does FELE's PE Ratio compare to its peers?
| FELE PE Ratio vs Peers |
|---|
| Company | PE | Estimated Growth | Market Cap |
|---|---|---|---|
| Peer Average | 28.3x | ||
WTS Watts Water Technologies | 20.7x | -0.3% | US$4.4b |
AQUA Evoqua Water Technologies | 74.5x | 25.6% | US$4.3b |
MLI Mueller Industries | 5.3x | n/a | US$3.5b |
TKR Timken | 12.8x | 9.2% | US$4.8b |
FELE Franklin Electric | 22.6x | 5.1% | 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.
| Fair Ratio | |
|---|---|
| Current PE Ratio | 22.6x |
| Fair PE Ratio | 16.4x |
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
1/6Future 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
5/6Past 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
5/6Financial 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
3/6Dividend 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 |
|---|
| Segment | Dividend 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.
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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 |
|---|
| Date | Total Comp. | Salary | Company Earnings |
|---|---|---|---|
| Jun 30 2022 | n/a | n/a | US$175m |
| Mar 31 2022 | n/a | n/a | US$155m |
| Dec 31 2021 | US$7m | US$870k | US$153m |
| Sep 30 2021 | n/a | n/a | US$139m |
| Jun 30 2021 | n/a | n/a | US$131m |
| Mar 31 2021 | n/a | n/a | US$117m |
| Dec 31 2020 | US$6m | US$824k | US$100m |
| Sep 30 2020 | n/a | n/a | US$93m |
| Jun 30 2020 | n/a | n/a | US$88m |
| Mar 31 2020 | n/a | n/a | US$96m |
| Dec 31 2019 | US$6m | US$798k | US$95m |
| Sep 30 2019 | n/a | n/a | US$99m |
| Jun 30 2019 | n/a | n/a | US$95m |
| Mar 31 2019 | n/a | n/a | US$93m |
| Dec 31 2018 | US$5m | US$765k | US$105m |
| Sep 30 2018 | n/a | n/a | US$89m |
| Jun 30 2018 | n/a | n/a | US$84m |
| Mar 31 2018 | n/a | n/a | US$83m |
| Dec 31 2017 | US$5m | US$730k | US$78m |
| Sep 30 2017 | n/a | n/a | US$87m |
| Jun 30 2017 | n/a | n/a | US$86m |
| Mar 31 2017 | n/a | n/a | US$80m |
| Dec 31 2016 | US$4m | US$694k | US$77m |
| Oct 01 2016 | n/a | n/a | US$75m |
| Jul 02 2016 | n/a | n/a | US$72m |
| Apr 02 2016 | n/a | n/a | US$65m |
| Jan 02 2016 | US$3m | US$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
| Date | Value | Name | Entity | Role | Shares | Max Price |
|---|---|---|---|---|---|---|
| 23 Aug 22 | SellUS$133,744 | Jonathan Grandon | Individual | 1,464 | US$91.36 | |
| 18 Aug 22 | SellUS$1,900,300 | Gregg Sengstack | Individual | 20,000 | US$95.46 | |
| 18 Aug 22 | SellUS$145,401 | Jonathan Grandon | Individual | 1,536 | US$94.66 | |
| 16 Aug 22 | SellUS$475,430 | Donald Kenney | Individual | 5,000 | US$95.51 | |
| 29 Jul 22 | SellUS$2,297,506 | Gregg Sengstack | Individual | 26,000 | US$89.56 | |
| 09 May 22 | BuyUS$140,716 | Jeffery Taylor | Individual | 2,000 | US$70.36 | |
| 25 Feb 22 | SellUS$262,298 | DeLancey Davis | Individual | 3,075 | US$85.30 | |
| 02 Nov 21 | SellUS$606,919 | Gregg Sengstack | Individual | 6,871 | US$88.33 | |
| 02 Nov 21 | SellUS$77,308 | Jonathan Grandon | Individual | 872 | US$88.66 | |
| 29 Oct 21 | SellUS$583,537 | Gregg Sengstack | Individual | 6,782 | US$86.04 |
Ownership Breakdown
| Owner Type | Number of Shares | Ownership Percentage |
|---|---|---|
| Public Companies | 2,571 | 0.006% |
| General Public | 936,324 | 2.0% |
| Individual Insiders | 7,548,667 | 16.3% |
| Institutions | 37,804,156 | 81.7% |
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Top Shareholders
| Ownership | Name | Shares | Current Value | Change % | Portfolio % | |
|---|---|---|---|---|---|---|
| 7,828,666 | $669.4m | -0.93% | 0.02% | |||
| 4,533,305 | $387.6m | -0.42% | 0.01% | |||
| 4,000,168 | $342.0m | 0% | no data | |||
| 3,023,103 | $258.5m | 0% | no data | |||
| 2,679,097 | $229.1m | 18.66% | 0.01% | |||
| 2,351,955 | $201.1m | -2.69% | 1.3% | |||
| 2,133,506 | $182.4m | 0.23% | 0.28% | |||
| 1,192,407 | $102.0m | -0.4% | 0.58% | |||
| 1,094,905 | $93.6m | -1.1% | 0.02% | |||
| 991,250 | $84.8m | -4.44% | 0.27% | |||
| 766,724 | $65.6m | -4.39% | 0.06% | |||
| 748,840 | $64.0m | -1.11% | 0.01% | |||
| 540,025 | $46.2m | -8.58% | 0.04% | |||
| 523,236 | $44.7m | 0% | 0.15% | |||
| 508,865 | $43.5m | 0% | 0.59% | |||
| 491,141 | $42.0m | 1.71% | 0.01% | |||
| 490,405 | $41.9m | -2.37% | 0.01% | |||
| 469,539 | $40.1m | -0.26% | 0.17% | |||
| 427,261 | $36.5m | 0% | no data | |||
| 423,820 | $36.2m | -2.16% | 0.01% | |||
| 420,841 | $36.0m | -0.73% | 0.05% | |||
| 408,183 | $34.9m | 2.98% | 0.01% | |||
| 394,168 | $33.7m | -11.06% | no data | |||
| 389,994 | $33.3m | 6.97% | 0.04% | |||
| 362,394 | $31.0m | 0.85% | 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
| Ticker | Exchange | Primary Security | Security Type | Country | Currency | Listed on |
|---|---|---|---|---|---|---|
| FELE | NasdaqGS (Nasdaq Global Select) | Yes | Common Shares | US | USD | Jan 1980 |
| FE4 | DB (Deutsche Boerse AG) | Yes | Common Shares | DE | EUR | Jan 1980 |
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2022/10/05 00:00 |
| End of Day Share Price | 2022/10/05 00:00 |
| Earnings | 2022/06/30 |
| Annual Earnings | 2021/12/31 |
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.