ASAZY or ALRM: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Security and Safety Services sector have probably already heard of Assa Abloy AB (ASAZY) and Alarm.com Holdings (ALRM). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Assa Abloy AB is sporting a Zacks Rank of #2 (Buy), while Alarm.com Holdings has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that ASAZY likely has seen a stronger improvement to its earnings outlook than ALRM has recently. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
ASAZY currently has a forward P/E ratio of 21.64, while ALRM has a forward P/E of 34.08. We also note that ASAZY has a PEG ratio of 1.57. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ALRM currently has a PEG ratio of 2.68.
Another notable valuation metric for ASAZY is its P/B ratio of 3.81. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, ALRM has a P/B of 5.30.
These are just a few of the metrics contributing to ASAZY's Value grade of B and ALRM's Value grade of D.
ASAZY sticks out from ALRM in both our Zacks Rank and Style Scores models, so value investors will likely feel that ASAZY is the better option right now.
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Assa Abloy AB (ASAZY) : Free Stock Analysis Report
Alarm.com Holdings, Inc. (ALRM) : Free Stock Analysis Report
