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BRC vs. ALLE: Which Stock Is the Better Value Option?

Zacks Equity Research
·2 mins read

Investors looking for stocks in the Security and Safety Services sector might want to consider either Brady (BRC) or 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.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Brady has a Zacks Rank of #2 (Buy), while Allegion has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that BRC likely has seen a stronger improvement to its earnings outlook than ALLE has recently. However, value investors will care about much more than just this.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.

BRC currently has a forward P/E ratio of 15.79, while ALLE has a forward P/E of 23.32. We also note that BRC has a PEG ratio of 2.26. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ALLE currently has a PEG ratio of 3.82.

Another notable valuation metric for BRC is its P/B ratio of 2.44. 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, ALLE has a P/B of 13.96.

These metrics, and several others, help BRC earn a Value grade of A, while ALLE has been given a Value grade of D.

BRC has seen stronger estimate revision activity and sports more attractive valuation metrics than ALLE, so it seems like value investors will conclude that BRC is the superior option right now.


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Brady Corporation (BRC) : Free Stock Analysis Report
 
Allegion PLC (ALLE) : Free Stock Analysis Report
 
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