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

Investors interested in stocks from the Security and Safety Services sector have probably already heard of 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.

Currently, Brady has a Zacks Rank of #2 (Buy), while Allegion has a Zacks Rank of #4 (Sell). This means that BRC's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

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 17.14, while ALLE has a forward P/E of 20.01. We also note that BRC has a PEG ratio of 2.45. 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. ALLE currently has a PEG ratio of 3.28.

Another notable valuation metric for BRC is its P/B ratio of 2.65. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, ALLE has a P/B of 11.57.

Based on these metrics and many more, BRC holds a Value grade of B, while ALLE has a Value grade of F.

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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