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Here's Why Investing in Allegion (ALLE) Stock Makes Sense Now
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Allegion plc (ALLE - Free Report) is poised to gain from strength in the Allegion International segment, acquired assets and shareholder-friendly moves.
Let’s delve into the factors that make this Zacks Rank #2 (Buy) company a smart investment choice at the moment.
Growth Catalysts
Business Strength: Strong momentum in the Allegion International segment is supporting the company’s performance. An increase in demand for electronic security products, driven by growing awareness about the security and safety of people, and infrastructure is aiding the segment. It is worth noting that the segmental revenues increased 1.4% year over year in the first quarter. Higher adoption of advanced technologies and solutions in the electronics security products market is expected to drive Allegion’s performance in the quarters ahead.
Driven by strength across the business, the company expects the Allegion International segment’s revenues to increase in the range of 1.5-3.5% year over year in 2024. Allegion’s total revenues are also anticipated to increase in the band of 1.5-3.5% in 2024 from the year-ago levels, while organic sales are expected to increase in the range of 1-3%. For the year, we expect the company’s sales to increase 2.5% on a year-over-year basis.
Accretive Acquisitions: Allegion is focused on strengthening its competency through business acquisitions. In the first quarter, acquisitions boosted the company’s sales by 0.3%. In March 2024, Allegion completed the acquisition of Montajes Electronics Dorcas S.L. (Dorcas), which has been incorporated into the Allegion International segment. The inclusion of Dorcas’ expertise in electric strikes and lock solutions, coupled with its strong innovation capabilities, enables Allegion to boost its security products portfolio. It also helps the company to expand its presence in lucrative end markets like healthcare and education.
Allegion also acquired Livingston, Scotland-based Boss Door Controls in February, thereby expanding its U.K. business with a complementary portfolio and broader channel access. Boss Door Controls is part of the Allegion International segment.
The company acquired Plano Group through one of its subsidiaries in January 2023. The acquisition expanded ALLE’s Interflex portfolio and AWFM business with new capabilities in SaaS models and recurring revenue solutions. In July 2022, the company acquired Access Technologies Business for $900 million. With this acquisition, Allegion has been able to enhance its access, egress and access control solutions offerings.
Rewards to Shareholders: Allegion is committed to returning value to shareholders through share repurchases and dividends. Dividends paid out totaled $42.1 million in the first three months of 2024, reflecting an increase of 6.9% year over year. In the same period, Allegion repurchased shares for $40 million. In 2023, the company disbursed dividends worth $158.7 million and bought back shares for $59.9 million. In February, Allegion announced a 7% hike in its quarterly dividend rate, which is now 48 cents per share.
Northward Estimate Revision: The Zacks Consensus Estimate for ALLE’s 2024 earnings has been revised 1% upward in the past 60 days.
Price Performance: Shares of ALLE have risen 14.5% in the past year.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked companies from the Industrial Products sector are discussed below.
Image: Bigstock
Here's Why Investing in Allegion (ALLE) Stock Makes Sense Now
Allegion plc (ALLE - Free Report) is poised to gain from strength in the Allegion International segment, acquired assets and shareholder-friendly moves.
Let’s delve into the factors that make this Zacks Rank #2 (Buy) company a smart investment choice at the moment.
Growth Catalysts
Business Strength: Strong momentum in the Allegion International segment is supporting the company’s performance. An increase in demand for electronic security products, driven by growing awareness about the security and safety of people, and infrastructure is aiding the segment. It is worth noting that the segmental revenues increased 1.4% year over year in the first quarter. Higher adoption of advanced technologies and solutions in the electronics security products market is expected to drive Allegion’s performance in the quarters ahead.
Driven by strength across the business, the company expects the Allegion International segment’s revenues to increase in the range of 1.5-3.5% year over year in 2024. Allegion’s total revenues are also anticipated to increase in the band of 1.5-3.5% in 2024 from the year-ago levels, while organic sales are expected to increase in the range of 1-3%. For the year, we expect the company’s sales to increase 2.5% on a year-over-year basis.
Accretive Acquisitions: Allegion is focused on strengthening its competency through business acquisitions. In the first quarter, acquisitions boosted the company’s sales by 0.3%. In March 2024, Allegion completed the acquisition of Montajes Electronics Dorcas S.L. (Dorcas), which has been incorporated into the Allegion International segment. The inclusion of Dorcas’ expertise in electric strikes and lock solutions, coupled with its strong innovation capabilities, enables Allegion to boost its security products portfolio. It also helps the company to expand its presence in lucrative end markets like healthcare and education.
Allegion also acquired Livingston, Scotland-based Boss Door Controls in February, thereby expanding its U.K. business with a complementary portfolio and broader channel access. Boss Door Controls is part of the Allegion International segment.
The company acquired Plano Group through one of its subsidiaries in January 2023. The acquisition expanded ALLE’s Interflex portfolio and AWFM business with new capabilities in SaaS models and recurring revenue solutions. In July 2022, the company acquired Access Technologies Business for $900 million. With this acquisition, Allegion has been able to enhance its access, egress and access control solutions offerings.
Rewards to Shareholders: Allegion is committed to returning value to shareholders through share repurchases and dividends. Dividends paid out totaled $42.1 million in the first three months of 2024, reflecting an increase of 6.9% year over year. In the same period, Allegion repurchased shares for $40 million. In 2023, the company disbursed dividends worth $158.7 million and bought back shares for $59.9 million. In February, Allegion announced a 7% hike in its quarterly dividend rate, which is now 48 cents per share.
Northward Estimate Revision: The Zacks Consensus Estimate for ALLE’s 2024 earnings has been revised 1% upward in the past 60 days.
Price Performance: Shares of ALLE have risen 14.5% in the past year.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked companies from the Industrial Products sector are discussed below.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 8.2%. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
The Zacks Consensus Estimate for AIT’s fiscal 2024 earnings has improved 2.1% in the past 60 days. The stock has risen 52.8% in the past year.
Belden Inc. (BDC - Free Report) presently carries a Zacks Rank of 2 and has a trailing four-quarter earnings surprise of 14.7%, on average.
The consensus estimate for BDC’s 2024 earnings has increased 8.3% in the past 60 days. Shares of Belden have risen 8.6% in the past year.
Crane Company (CR - Free Report) presently carries a Zacks Rank of 2. CR delivered a trailing four-quarter earnings surprise of 15.2%, on average.
The Zacks Consensus Estimate for CR’s 2024 earnings has increased 3.1% in the past 60 days. Its shares have risen 94.9% in the past year.