Franklin Electric Co., Inc. (FELE): A Bull Case Theory 

We came across a bullish thesis on Franklin Electric Co., Inc. on Flyover Stocks’s Substack by Todd Wenning. In this article, we will summarize the bulls’ thesis on FELE. Franklin Electric Co., Inc.’s share was trading at $95.20 as of September 30th. FELE’s trailing and forward P/E were 24.64 and 20.16 respectively according to Yahoo Finance.

Franklin Electric, headquartered in Fort Wayne, Indiana, is a largely under-the-radar but highly impactful industrial company, specializing in mission-critical products that move and manage water and fuel. Founded in 1944 to produce portable generators for wartime communications, the company pivoted post-war to focus on water systems, developing the first commercially viable submersible motor in 1953. This innovation revolutionized agriculture and rural development by providing efficient, reliable water access, boosting crop yields, supporting housing expansion in areas without municipal water, and improving global food and water security.

Today, Franklin Electric’s Water Systems segment remains the core of the business, reflecting decades of technological leadership and steady demand, including specialized dewatering solutions used in mining and construction projects. In 1988, the company expanded into Energy Systems with submersible fuel pumps for gas stations, capitalizing on new environmental regulations requiring significant infrastructure investment. Over time, Franklin broadened its offerings to encompass the full fuel delivery ecosystem, including underground piping and containment systems, dispensing, and vapor recovery technology under its FE Petro and Healy brands.

While Energy Systems accounts for roughly 13% of revenue, it generates more than 30% of operating income due to high operating margins exceeding 30%. Across both segments, Franklin Electric provides essential infrastructure solutions that underpin the functioning of agriculture, construction, and fueling systems, creating durable demand and resilient cash flow. With secular tailwinds in water management, energy infrastructure, and regulatory compliance, the company stands out as a stable, high-margin industrial operator with meaningful growth opportunities. Its combination of entrenched market positions, critical products, and exposure to ongoing infrastructure needs makes Franklin Electric an attractive and strategically compelling investment.

Previously we covered a bullish thesis on Graco Inc. (GGG) by Stock Analysis Compilation in December 2024, which highlighted its strong position in fluid handling equipment, pricing power, high margins, and stable parts and accessories demand. The company’s stock price has been trading flat since our coverage. The thesis still stands as Graco’s durable niche remains attractive. Todd Wenning shares a similar focus but emphasizes Franklin Electric’s critical water and fuel infrastructure and high-margin growth.

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Disclosure: None.