Financial Contrast: Allegion (NYSE:ALLE) vs. Brady (NYSE:BRC)

Allegion (NYSE:ALLE) and Brady (NYSE:BRC) are both industrials companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, risk, institutional ownership, earnings, profitability and analyst recommendations.

Risk & Volatility

Allegion has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500. Comparatively, Brady has a beta of 0.62, meaning that its stock price is 38% less volatile than the S&P 500.

Earnings and Valuation

This table compares Allegion and Brady”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Allegion	$4.07 billion	2.82	$643.80 million	$7.32	18.24
Brady	$1.51 billion	2.65	$189.26 million	$4.39	19.42

Allegion has higher revenue and earnings than Brady. Allegion is trading at a lower price-to-earnings ratio than Brady, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations for Allegion and Brady, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Allegion	0	9	2	1	2.33
Brady	0	0	2	0	3.00

Allegion currently has a consensus price target of $160.89, suggesting a potential upside of 20.50%. Brady has a consensus price target of $103.00, suggesting a potential upside of 20.81%. Given Brady’s stronger consensus rating and higher probable upside, analysts plainly believe Brady is more favorable than Allegion.

Insider and Institutional Ownership

92.2% of Allegion shares are held by institutional investors. Comparatively, 76.3% of Brady shares are held by institutional investors. 0.6% of Allegion shares are held by company insiders. Comparatively, 15.6% of Brady shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Allegion and Brady’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Allegion	15.24%	35.41%	13.53%
Brady	12.93%	19.01%	13.47%

Dividends

Allegion pays an annual dividend of $2.20 per share and has a dividend yield of 1.6%. Brady pays an annual dividend of $0.98 per share and has a dividend yield of 1.1%. Allegion pays out 30.1% of its earnings in the form of a dividend. Brady pays out 22.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Allegion has increased its dividend for 11 consecutive years and Brady has increased its dividend for 39 consecutive years.

Summary

Allegion beats Brady on 11 of the 17 factors compared between the two stocks.

About Allegion

Allegion plc manufactures and sells mechanical and electronic security products and solutions worldwide. The company offers door controls and systems and exit devices; locks, locksets, portable locks, and key systems and services; electronic security products and access control systems; time, attendance, and workforce productivity systems; doors, accessories, and other. It also provides services and software, which includes inspection, maintenance, and repair services for its automatic entrance solutions; and software as a service, including access control, IoT integration, and workforce management solutions, as well as aftermarket services, design and installation offerings, and locksmith services. The company sells its products and solutions to end-users in commercial, institutional, and residential facilities, including education, healthcare, government, hospitality, retail, commercial office, and single and multi-family residential markets under the CISA, Interflex, LCN, Schlage, SimonsVoss, and Von Duprin brands. It sells its products and solutions through distribution and retail channels, such as specialty distribution, e-commerce, and wholesalers, as well as through various retail channels comprising do-it-yourself home improvement centers, online and e-commerce platforms, and small specialty showroom outlets. Allegion plc was incorporated in 2013 and is headquartered in Dublin, Ireland.

About Brady

Brady Corporation manufactures and supplies identification solutions (IDS) and workplace safety (WPS) products to identify and protect premises, products, and people in the United States and internationally. The company offers materials, printing systems, RFID, and bar code scanners for product identification, brand protection labeling, work in process labeling, finished product identification, and industrial track and trace applications; safety signs, floor-marking tapes, pipe markers, labeling systems, spill control products, lockout/tagout device, and software and services for safety compliance auditing, procedure writing, and training; and hand-held printers, wire markers, sleeves, and tags for wire identification. It also provides name tags, badges, lanyards, rigid card printing systems, and access control software for people identification; and wristbands, labels, printing systems, and other products for tracking and improving the safety of patients. In addition, the company offers workplace safety, identification, and compliance products, such as safety and compliance signs, tags, labels, and markings; informational signage and markings; asset tracking labels; facility safety and personal protection equipment; first-aid products; and other compliance products for process, government, education, construction, and utilities industries. Further, it provides stock and custom identification products; and sells related resale products. The company serves industrial and electronic manufacturing, healthcare, chemical, oil, gas, automotive, aerospace, governments, mass transit, electrical contractors, education, leisure and entertainment, telecommunications, and other industries through distributors, direct sales force, and digital channels. Brady Corporation was incorporated in 1914 and is headquartered in Milwaukee, Wisconsin.