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BRC vs. ALLE: Which Stock Should Value Investors Buy Now?

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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 presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Brady and Allegion are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. This means that BRC's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

BRC currently has a forward P/E ratio of 16.42, while ALLE has a forward P/E of 20.11. We also note that BRC has a PEG ratio of 3.46. 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 4.48.

Another notable valuation metric for BRC is its P/B ratio of 3.33. 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 8.93.

These metrics, and several others, help BRC earn a Value grade of B, while ALLE has been given a Value grade of C.

BRC sticks out from ALLE in both our Zacks Rank and Style Scores models, so value investors will likely feel that BRC is the better option right now.


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