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Franklin Electric Co. (FELE)
NASDAQ:FELE
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Franklin Electric Co
(NASDAQ:FELE)73Outperform
Franklin Electric Co (FELE) vs. S&P 500 (SPY)
Market Cap
$4.62B
Dividend Yield1%
Average Volume (3M)226.71K
Price to Earnings (P/E)26.1
Beta (1Y)0.98
Revenue Growth-2.12%
EPS Growth-6.07%
CountryUS
Employees6,400
SectorIndustrials
Sector Strength66
IndustryIndustrial Goods
Share Statistics
EPS (TTM)3.86
Shares Outstanding45,717,686
10 Day Avg. Volume234,341
30 Day Avg. Volume226,707
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.28
Price to Cash Flow (P/CF)10.50
P/FCF Ratio11.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$100.50Price Target Upside-2.19% Downside
Rating ConsensusHold
Number of Analyst Covering2
Franklin Electric Co Business Overview & Revenue Model
Company DescriptionFranklin Electric Co. (FELE) is a global leader in the manufacturing and distribution of systems and components for the movement of water and fuel. The company operates in two primary segments: Water Systems and Fueling Systems. With a strong emphasis on innovation, Franklin Electric provides a wide range of products, including submersible pumps, motors, drives, electronic controls, and monitoring devices, catering to residential, commercial, and industrial markets worldwide.
How the Company Makes MoneyFranklin Electric generates revenue primarily through the sale of its water and fueling systems. In the Water Systems segment, the company earns money by providing submersible motors, pumps, drives, electronic controls, and monitoring devices used in groundwater, surface water, and wastewater applications. This includes products for residential, agricultural, and industrial water systems. The Fueling Systems segment contributes to revenue through the sale of fuel pumping systems, fuel management systems, and monitoring and control systems used in fueling stations worldwide. Key revenue streams include direct sales to distributors, retailers, and OEMs (Original Equipment Manufacturers). The company's earnings are bolstered by its strong global distribution network, strategic acquisitions, and focus on developing energy-efficient products that meet regulatory standards.
Franklin Electric Co Financial Statement Overview
Summary
Franklin Electric exhibits a strong financial position with consistent revenue growth, stable profitability, and a healthy balance sheet. While the company maintains a solid cash flow, continued investment in capital expenditures reflects a strategic focus on growth. The financial stability is underscored by robust equity and prudent debt levels, although monitoring of debt increases and cost management is advised to sustain profitability.Income Statement
Franklin Electric has demonstrated consistent revenue growth with a notable increase from $1.24 billion in 2020 to $2.06 billion in 2023. The gross profit margin remains healthy, consistently above 30%, indicating strong operational efficiency. However, the net profit margin has seen slight fluctuations, reflecting some volatility in cost management. The EBIT and EBITDA margins have also been stable, showing resilience in core profit generation.78
Positive
Balance Sheet
The company's balance sheet is robust with a strong equity base, as indicated by the equity ratio consistently above 60%. The debt-to-equity ratio is moderate, suggesting prudent use of leverage. The return on equity (ROE) is favorable, showcasing efficient use of shareholders' equity to generate profits. The significant increase in cash reserves in 2024 strengthens liquidity, although the rise in total debt warrants cautious monitoring.82
Very Positive
Cash Flow
Cash flow generation remains solid, with operating cash flow consistently exceeding net income, indicating high-quality earnings. The free cash flow has shown positive growth, although the capital expenditure remains significant, reflecting ongoing investments. The free cash flow to net income ratio demonstrates good cash conversion, though the fluctuations in free cash flow growth suggest some variability in cash management.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.02B | 2.07B | 2.04B | 1.66B | 1.25B | Gross Profit |
| 717.28M | 697.01M | 691.43M | 576.09M | 433.14M | EBIT |
| 243.65M | 262.44M | 257.19M | 189.19M | 130.51M | EBITDA |
| 294.24M | 306.27M | 319.13M | 253.28M | 176.51M | Net Income Common Stockholders |
| 180.31M | 193.27M | 187.33M | 153.86M | 100.46M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 220.54B | 84.96M | 45.79M | 40.54M | 130.79M | Total Assets |
| 1.82T | 1.73B | 1.69B | 1.58B | 1.27B | Total Debt |
| 191.62B | 156.28M | 264.84M | 236.77M | 126.47M | Net Debt |
| -28.92B | 71.31M | 219.05M | 196.24M | -4.31M | Total Liabilities |
| 552.00B | 517.83M | 623.40M | 626.54M | 422.36M | Stockholders Equity |
| 1.27T | 1.21B | 1.07B | 946.48M | 847.83M |
| Cash Flow | Free Cash Flow | |||
| 219.67M | 274.30M | 59.77M | 99.65M | 189.00M | Operating Cash Flow |
| 261.35M | 315.71M | 101.67M | 129.76M | 211.85M | Investing Cash Flow |
| -45.63M | -74.29M | -43.07M | -264.81M | -78.81M | Financing Cash Flow |
| -74.07M | -192.19M | -48.47M | 50.89M | -66.58M |
Franklin Electric Co Technical Analysis
Positive
102.75
Price Trends
99.61
Positive
102.04
Positive
100.55
Positive
Market Momentum
0.28
Positive
54.28
Neutral
44.65
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FELE, the sentiment is Positive. The current price of 102.75 is above the 20-day moving average (MA) of 102.19, above the 50-day MA of 99.61, and above the 200-day MA of 100.55, indicating a bullish trend. The MACD of 0.28 indicates Positive momentum. The RSI at 54.28 is Neutral, neither overbought nor oversold. The STOCH value of 44.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FELE.
Franklin Electric Co Risk Analysis
Franklin Electric Co disclosed 19 risk factors in its most recent earnings report. Franklin Electric Co reported the most risks in the “Ability to Sell” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Franklin Electric Co Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $11.19B | 21.83 | 19.60% | 0.93% | 10.59% | 27.04% | |
77 Outperform | $7.05B | 24.35 | 18.08% | 0.81% | 9.53% | 10.98% | |
74 Outperform | $31.52B | 35.48 | 8.55% | 1.15% | 16.23% | 34.42% | |
73 Outperform | $4.62B | 26.15 | 14.53% | 1.00% | -2.12% | -6.07% | |
73 Outperform | $15.03B | 24.36 | 18.45% | 1.05% | -0.53% | 0.13% | |
63 Neutral | $9.79B | 18.81 | 28.63% | 1.93% | -0.90% | -1.69% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% |
* Industrials Sector Average
Performance Comparison
FELE
Franklin Electric Co
102.75
2.35
2.34%
ITT
ITT
138.69
13.37
10.67%
PNR
Pentair
88.35
7.95
9.89%
AOS
A. O. Smith Corporation
69.41
-14.45
-17.23%
WTS
Watts Water Technologies
215.05
13.37
6.63%
XYL
Xylem
130.62
5.84
4.68%
Franklin Electric Co Earnings Call Summary
Earnings Call Date: Feb 18, 2025 | % Change Since: 2.77% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a challenging year with mixed results. While there were significant achievements such as sales growth, strategic acquisitions, and a dividend increase, the company faced numerous challenges, including a decline in operating margins, foreign exchange headwinds, and restructuring costs. The positive aspects were offset by substantial lowlights, indicating a balanced outlook.Highlights
Consolidated Sales Growth
Fourth quarter consolidated sales totaled $486 million, up 3% over the prior year period, driven by distribution and energy systems segments.
Energy Systems Segment Improvement
Energy systems segment saw a notable margin improvement in Q4, achieving a record operating margin for 2024 despite a challenging start to the year.
Strategic Acquisitions
Completed a strategic acquisition in Australia and signed an agreement for Barnes De Colombia, expected to add approximately $50 million in revenue for 2025.
Dividend Increase
Announced a 6% increase in the quarterly cash dividend, marking the 33rd consecutive year of dividend increases.
Strong Cash Flow
The company generated $261.4 million in net cash flows from operations activities during 2024, with a free cash flow conversion rate of 122%.
Lowlights
Decline in Operating Margins
Fourth quarter operating margins decreased to 8.9% from 10.7% in the prior year, due to higher SG&A and restructuring costs.
Foreign Exchange Headwinds
Foreign currency translations presented ongoing headwinds, negatively impacting sales and operating income margins across segments.
Challenges in Water Systems Segment
Water systems segment saw flat sales, with operating income decreasing due to unfavorable geographic mix and negative foreign exchange impacts.
Restructuring Charges
Incurred $3.4 million in restructuring expenses during Q4 2024, primarily related to headcount reductions and facility closures.
Company Guidance
During the Franklin Electric Co., Inc. fourth quarter and full year 2024 earnings call, the company provided guidance for 2025, expecting full-year sales to range between $2.09 billion and $2.15 billion, including impacts from recent acquisitions. They anticipate GAAP EPS to be between $4.05 and $4.25. The company forecasts a 3% to 7% organic EPS growth and plans to achieve a compound annual growth rate above market growth through strategic investments in capacity, innovation, and digital capabilities. Currency headwinds are expected to reduce sales by $15 to $20 million, around 1% of the total. Franklin Electric Co., Inc. is also focused on operational efficiencies and has announced a larger capital expenditure plan, targeting 2.5% of sales for 2025, up from the historical 2%.Franklin Electric Co Corporate Events
Financial Disclosures
Franklin Electric Co Releases Quarterly Presentation Materials
Neutral
Feb 28, 2025
On February 28, 2025, Franklin Electric Co., Inc. released quarterly presentation materials on its website for investor communications and conferences. This release is part of their ongoing efforts to provide transparency and engage with stakeholders, although it is not considered a formal filing under securities regulations.
Executive/Board Changes
Franklin Electric Co CFO Jeffery Taylor Resigns
Neutral
Feb 24, 2025
On February 21, 2025, Franklin Electric Co. announced that its Chief Financial Officer, Jeffery Taylor, will resign from his position effective March 28, 2025. The company clarified that Mr. Taylor’s departure was amicable and not due to any disagreements regarding company operations or accounting practices. He will assist in the transition to his successor and will receive severance benefits as per the company’s Executive Severance Policy.
M&A TransactionsBusiness Operations and Strategy
Franklin Electric to Acquire Barnes de Colombia S.A.
Positive
Feb 14, 2025
On February 14, 2025, Franklin Electric Co., Inc. announced a definitive agreement to acquire Barnes de Colombia S.A., a leading Colombian manufacturer and distributor of industrial and commercial pumps. This strategic acquisition is part of Franklin Electric’s long-term growth and diversification strategy, aimed at enhancing its market presence in Latin America and expanding its product portfolio. The acquisition is subject to customary closing conditions, including Colombian antitrust clearance, with an expected closure around March 1, 2025. Barnes de Colombia’s established operations across various Latin American countries and its robust distribution network are expected to accelerate Franklin Electric’s growth in the region, strengthening its ability to serve customers with an expanded portfolio of innovative products.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.