Allegion plc ALLE is well-poised for growth, driven by strengthening demand in end markets and effective pricing in the near term despite labor, material and freight-related cost inflation. ALLE anticipates revenues to increase 13-14% year over year for 2022, with organic growth of 9-10%. It predicts its revenues, margins and earnings to improve on a sequential basis throughout this year. ALLE’s healthy operational performance is likely to boost earnings 85-95 cents per share.
Allegion’s acquisition of Stanley Black & Decker, Inc.’s Access Technologies Business enhanced its access, egress and access control solutions offering. The addition of certain assets of Astrum Benelux B.V. and WorkforceIT B.V. (July 2021) boosted ALLE’s Interflex unit’s cloud and mobile solutions, along with its software-as-a-service capabilities. The buyout of Yonomi (January 2021) strengthened its offerings of smart-home solutions.
ALLE’s measures to reward its shareholders through dividend payments and share buybacks are encouraging. During the first six months of 2022, Allegion paid out dividends worth $71.5 million and repurchased shares worth $61 million. It also announced a hike of 14% in its quarterly dividend rate in Feb 2022.
In light of the above-mentioned positives, we believe, investors should hold on to the Allegion stock for now, as is suggested by its current Zacks Rank #3 (Hold).
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In the past year, the stock has lost 32.4% compared with the industry’s decline of 30.8%.
Stocks to Consider
Some better-ranked companies from the industrial products sector are discussed below:
Applied Industrial Technologies, Inc. AIT presently sports a Zacks Rank #1 (Strong Buy). AIT delivered a trailing four-quarter earnings surprise of 22.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
AIT’s earnings estimates have increased 5.8% for fiscal 2023 (ending June 2023) in the past 60 days. Its shares have rallied 20.5% in the past year.
Greif, Inc. GEF presently has a Zacks Rank #2 (Buy). GEF delivered a trailing four-quarter earnings surprise of 22.9%, on average.
GEF’s earnings estimates have increased 0.4% for fiscal 2022 (ending October 2022) in the past 60 days. Its shares have risen 9.7% in the past year.
Valmont Industries, Inc. VMI presently has a Zacks Rank of 2. VMI’s earnings surprise in the last four quarters was 13.7%, on average.
In the past 60 days, Valmont’s earnings estimates have increased 3.8% for 2022. The stock has rallied 14.7% in the past year.
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