Head to Head Survey: AZZ (NYSE:AZZ) and Allegion (NYSE:ALLE)

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

Institutional & Insider Ownership

90.9% of AZZ shares are held by institutional investors. Comparatively, 92.2% of Allegion shares are held by institutional investors. 1.7% of AZZ shares are held by company insiders. Comparatively, 0.6% of Allegion shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

AZZ pays an annual dividend of $0.96 per share and has a dividend yield of 0.7%. Allegion pays an annual dividend of $2.20 per share and has a dividend yield of 1.5%. AZZ pays out 14.6% of its earnings in the form of a dividend. Allegion pays out 28.9% 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 raised its dividend for 11 consecutive years. Allegion is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

AZZ has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500. Comparatively, Allegion has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500.

Earnings and Valuation

This table compares AZZ and Allegion”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AZZ	$1.65 billion	2.50	$317.26 million	$6.56	20.89
Allegion	$4.07 billion	3.15	$643.80 million	$7.62	19.76

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
AZZ	11.83%	14.18%	8.48%
Allegion	15.36%	35.41%	13.80%

Analyst Recommendations

This is a breakdown of current ratings for AZZ and Allegion, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AZZ	0	2	4	0	2.67
Allegion	0	6	3	0	2.33

AZZ presently has a consensus target price of $155.25, indicating a potential upside of 13.32%. Allegion has a consensus target price of $162.50, indicating a potential upside of 7.93%. Given AZZ’s stronger consensus rating and higher possible upside, equities research analysts plainly believe AZZ is more favorable than Allegion.

Summary

Allegion beats AZZ on 10 of the 17 factors compared between the two stocks.

About AZZ

AZZ Inc. provides hot-dip galvanizing and coil coating solutions in North America. It offers metal finishing solutions for corrosion protection, including hot-dip galvanizing, spin galvanizing, powder coating, anodizing, and plating to steel fabrication and other industries, as well as to fabricators or manufacturers that provide services to the transmission and distribution, bridge and highway, petrochemical, and general industrial markets; and original equipment manufacturers. It also provides aesthetic and corrosion protective coatings and related value-added services for steel and aluminum coil primarily serving the construction; appliance; heating, ventilation, and air conditioning; container; transportation; and other end markets. The company was incorporated in 1956 and is headquartered in Fort Worth, Texas.

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.