BRC or ALLE: Which Is the Better Value Stock Right Now?
Investors with an interest in Security and Safety Services stocks have likely encountered both Brady (BRC) and Allegion (ALLE). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Brady and Allegion are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BRC is likely seeing its earnings outlook improve to a greater extent. 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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
BRC currently has a forward P/E ratio of 14.45, while ALLE has a forward P/E of 18.72. We also note that BRC has a PEG ratio of 2.07. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ALLE currently has a PEG ratio of 4.73.
Another notable valuation metric for BRC is its P/B ratio of 2.69. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, ALLE has a P/B of 8.60.
These metrics, and several others, help BRC earn a Value grade of B, while ALLE has been given a Value grade of C.
BRC stands above ALLE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BRC is the superior value option right now.
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Brady Corporation (BRC) : Free Stock Analysis Report
Allegion PLC (ALLE) : Free Stock Analysis Report
