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

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Investors looking for stocks in the Security and Safety Services sector might want to consider either Brady (BRC - Free Report) or Allegion (ALLE - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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

Currently, both Brady and Allegion are holding a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one piece of the puzzle for value investors.

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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

BRC currently has a forward P/E ratio of 15.72, while ALLE has a forward P/E of 16.91. We also note that BRC has a PEG ratio of 2.04. This metric is used similarly to the famous 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 notable 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 with its book value, which is defined as total assets minus total liabilities. For comparison, ALLE has a P/B of 7.76.

These are just a few of the metrics contributing to BRC's Value grade of B and ALLE's Value grade of C.

Both BRC and ALLE are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BRC is the superior value option right now.


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