Which stock offers the better value option?

Investors looking for stocks in the security and protection services space should consider either Brady (BRC) or Allegion (ALLE). But which of these two stocks is more attractive to value investors? To find out, we need to take a closer look at the two.

Everyone has their own methods for finding great value opportunities, but our model combines an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank places an emphasis on earnings estimates and estimate revisions, while our Style Scores aim to identify stocks with specific traits.

Currently, both Brady and Allegion have a Zacks Rank of #2 (Buy). This system places emphasis on companies that have seen positive earnings revisions, so investors can be confident that these stocks have better earnings prospects. However, for value investors, this is only one piece of the puzzle.

Value investors also tend to use a set of traditional, tried-and-tested numbers to find stocks that they believe are undervalued at their current price levels.

The Style Score Value assessment incorporates a number of important fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and numerous other key statistics commonly used by value investors.

BRC currently has a forward P/E ratio of 15.72, while ALLE has a forward P/E ratio of 16.91. We also note that BRC has a PEG ratio of 2.04. This metric is used similarly to the well-known P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. ALLE currently has a PEG ratio of 3.77.

Another important valuation metric for BRC is its P/B ratio of 3.02. The P/B ratio is used to compare a stock’s market value to its book value, which is defined as total assets minus total liabilities. For comparison, ALL has a P/B ratio of 7.76.

These are just some of the metrics that contribute to BRC’s B rating and ALLE’s C rating.

Both BRC and ALLE are impressive stocks with solid earnings prospects, but based on these valuation numbers, we believe BRC is the better value 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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