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4 Security & Safety Stocks to Consider on Promising Industry Trends
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The Zacks Security and Safety Services industry is well-positioned to benefit from the solid demand for products and solutions, driven by growing awareness about the security and safety of people and infrastructure. Rising demand for cybersecurity products is also likely to aid the industry’s growth.
Enhanced research and development efforts, backed by government support, augur well for the industry’s near-term prospects. Companies like ADT Inc. (ADT - Free Report) , Resideo Technologies, Inc. (REZI - Free Report) , Napco Security Technologies, Inc. (NSSC - Free Report) and Lakeland Industries, Inc. (LAKE - Free Report) are a few industry participants that are expected to capitalize on the opportunities.
Industry Description
The Zacks Security and Safety Services industry comprises firms that provide sophisticated and interactive security solutions and related services, which are meant to be used for residential, commercial and institutional purposes. A few industry players develop electrical weapons for personal defense and military, federal, law enforcement and private security. Some of the companies provide solutions for the recovery of stolen vehicles, wireless communication devices, equipment for the safety of facility infrastructure and employees and products for detecting hazards. A few players provide a variety of services to automobile owners and insurance companies. The industry serves customers from various end markets, including manufacturing, electronics, hospitality, education, construction, telecommunications, aerospace and medical.
3 Security & Safety Services Industry Trends in Focus
Healthy Demand for Security and Safety Services: Growing instances of terrorism and criminal activities, coupled with concerns related to the ever-increasing fraudulent activities, are driving demand for security and safety services. To enhance the safety and surveillance of people or assets, governments, commercial operations, communities and other establishments across the world are rapidly deploying IP-based cameras. This is acting as a key growth driver for the industry. With growing urbanization, the increasing requirement to ensure the safety and security of infrastructure at offices, factories and residential buildings is aiding industry participants. Also, with rising instances of hacking, the industry is seeing higher demand for Internet security products and services like firewalls, intrusion detection systems and intrusion prevention systems. People’s preference for purchasing products through e-commerce platforms has also opened up opportunities for industry players.
Other Favorable Trends: Increases in budgets and funds from governments have invited several big players to make significant investments in the research and development of advanced products and services. Government and law enforcement agencies in the United States and Canada are directly working with industry participants to strengthen the security infrastructure of smart cities. This has been helping the industry players to come up with enhanced products and solutions, thereby catering to the needs of customers.
High Debt Levels: Industry participants constantly focus on innovation, product upgrades and the development of new products to cater to the changing customer needs and stay competitive, making steady investments necessary. While this augurs well for the industry’s long-term growth, hefty investments in research and development often leave companies with highly leveraged balance sheets. The industry’s long-term debt/capital ratio is currently 0.61, higher than 0.28 of the Zacks S&P 500 composite index.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Security and Safety Services industry, housed within the broader Industrial Products sector, currently carries a Zacks Industry Rank #38. This rank places it in the top 16% of 243 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates robust near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry’s positioning in the top 50% of the Zacks-Ranked industries is a result of the solid earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are putting more faith in this group's earnings growth potential. The industry’s earnings estimates for 2025 have increased 11.2% over the past year.
We will present a few stocks from the industry that you may want to consider for your portfolio. But before that, it is worth taking a look at the industry’s shareholder returns and its current valuation first.
Industry Outperforms Sector & S&P 500
The Zacks Security and Safety Services industry has outperformed both the broader Industrial Products sector and the S&P 500 composite index in the past year.
Over this period, the industry has moved up 18.9% compared with the S&P 500 Index’s increase of 15.4% and against the sector’s decline of 3.5%.
One-Year Price Performance
Industry's Current Valuation
On the basis of forward P/E (F12M), which is a commonly used multiple for valuing security and safety services stocks, the industry is currently trading at 18.64X compared with the S&P 500’s and the sector’s 23.37X and 19.61X, respectively.
Over the past five years, the industry has traded as high as 21.90X, as low as 14.08X and at the median of 17.28X, as the chart below shows:
Price-to-Earnings Ratio vs SP500
Price-to-Earnings Ratio vs Sector
4 Security and Safety Services Stocks to Keep a Tab on
Lakeland Industries: Based in Huntsville, AL, the company is engaged in providing industrial protective clothing and accessories, including firefighting and heat protective gear and chemical protective suits for the industrial and public protective clothing market. LAKE is benefiting from an increase in demand for the fire service product line. Also, significant contributions from the acquisitions of Veridian and LHD Group also bode well for it.
In the past 60 days, estimates for this Zacks Rank #1 (Strong Buy) company’s earnings have increased more than 100% for fiscal 2026 (ending January 2026). Although shares of Lakeland Industries lost 18.8% in the past year, they rose 16.3% in the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.
Price and Consensus: LAKE
Resideo Technologies: Based in Scottsdale, AZ, REZI is engaged in producing and offering home comfort, safety and security, and energy management products under brands including Resideo, Braukmann and First Alert. Resideo Technologies is gaining from strong demand for First Alert SC5 connected smoke and carbon monoxide detectors. Also, continued focus on product development and innovation bodes well for the company.
The Zacks Consensus Estimate for Resideo Technologies’ 2025 earnings has remained steady in the past 60 days. Shares of this Zacks Rank #1 company have surged around 89% in the past year.
Price and Consensus: REZI
NAPCO Security: Based in Amityville, NY, the company provides electronic security systems to commercial, industrial, residential, institutional and government customers. NAPCO Security is benefiting from solid growth in equipment revenues, driven by strong demand for door-locking products. Also, the company’s focus on expanding recurring service revenues (RSR) is likely to be beneficial moving ahead.
In the past 60 days, estimates for NSSC’s earnings have increased 4.4% for fiscal 2026 (ending June 2026). This Zacks Rank #2 (Buy) company has gained 16.2% in the past year.
Price and Consensus: NSSC
ADT: Based in Boca Raton, FL, the company offers security and smart home solutions, including smart security cameras, burglar & life safety alarms and smart home automation systems to residential customers and small businesses. ADT is gaining from strength in the Monitoring and related services (M&S) business, driven by an increase in average prices. Also, the company’s strategic initiatives, innovation and operational excellence bode well.
The Zacks Consensus Estimate for ADT’s 2025 earnings has remained steady in the past 60 days. Shares of this Zacks Rank #3 (Hold) company have gained 4.6% in a year.
Price and Consensus: ADT
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4 Security & Safety Stocks to Consider on Promising Industry Trends
The Zacks Security and Safety Services industry is well-positioned to benefit from the solid demand for products and solutions, driven by growing awareness about the security and safety of people and infrastructure. Rising demand for cybersecurity products is also likely to aid the industry’s growth.
Enhanced research and development efforts, backed by government support, augur well for the industry’s near-term prospects. Companies like ADT Inc. (ADT - Free Report) , Resideo Technologies, Inc. (REZI - Free Report) , Napco Security Technologies, Inc. (NSSC - Free Report) and Lakeland Industries, Inc. (LAKE - Free Report) are a few industry participants that are expected to capitalize on the opportunities.
Industry Description
The Zacks Security and Safety Services industry comprises firms that provide sophisticated and interactive security solutions and related services, which are meant to be used for residential, commercial and institutional purposes. A few industry players develop electrical weapons for personal defense and military, federal, law enforcement and private security. Some of the companies provide solutions for the recovery of stolen vehicles, wireless communication devices, equipment for the safety of facility infrastructure and employees and products for detecting hazards. A few players provide a variety of services to automobile owners and insurance companies. The industry serves customers from various end markets, including manufacturing, electronics, hospitality, education, construction, telecommunications, aerospace and medical.
3 Security & Safety Services Industry Trends in Focus
Healthy Demand for Security and Safety Services: Growing instances of terrorism and criminal activities, coupled with concerns related to the ever-increasing fraudulent activities, are driving demand for security and safety services. To enhance the safety and surveillance of people or assets, governments, commercial operations, communities and other establishments across the world are rapidly deploying IP-based cameras. This is acting as a key growth driver for the industry. With growing urbanization, the increasing requirement to ensure the safety and security of infrastructure at offices, factories and residential buildings is aiding industry participants. Also, with rising instances of hacking, the industry is seeing higher demand for Internet security products and services like firewalls, intrusion detection systems and intrusion prevention systems. People’s preference for purchasing products through e-commerce platforms has also opened up opportunities for industry players.
Other Favorable Trends: Increases in budgets and funds from governments have invited several big players to make significant investments in the research and development of advanced products and services. Government and law enforcement agencies in the United States and Canada are directly working with industry participants to strengthen the security infrastructure of smart cities. This has been helping the industry players to come up with enhanced products and solutions, thereby catering to the needs of customers.
High Debt Levels: Industry participants constantly focus on innovation, product upgrades and the development of new products to cater to the changing customer needs and stay competitive, making steady investments necessary. While this augurs well for the industry’s long-term growth, hefty investments in research and development often leave companies with highly leveraged balance sheets. The industry’s long-term debt/capital ratio is currently 0.61, higher than 0.28 of the Zacks S&P 500 composite index.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Security and Safety Services industry, housed within the broader Industrial Products sector, currently carries a Zacks Industry Rank #38. This rank places it in the top 16% of 243 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates robust near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry’s positioning in the top 50% of the Zacks-Ranked industries is a result of the solid earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are putting more faith in this group's earnings growth potential. The industry’s earnings estimates for 2025 have increased 11.2% over the past year.
We will present a few stocks from the industry that you may want to consider for your portfolio. But before that, it is worth taking a look at the industry’s shareholder returns and its current valuation first.
Industry Outperforms Sector & S&P 500
The Zacks Security and Safety Services industry has outperformed both the broader Industrial Products sector and the S&P 500 composite index in the past year.
Over this period, the industry has moved up 18.9% compared with the S&P 500 Index’s increase of 15.4% and against the sector’s decline of 3.5%.
One-Year Price Performance
Industry's Current Valuation
On the basis of forward P/E (F12M), which is a commonly used multiple for valuing security and safety services stocks, the industry is currently trading at 18.64X compared with the S&P 500’s and the sector’s 23.37X and 19.61X, respectively.
Over the past five years, the industry has traded as high as 21.90X, as low as 14.08X and at the median of 17.28X, as the chart below shows:
Price-to-Earnings Ratio vs SP500
Price-to-Earnings Ratio vs Sector
4 Security and Safety Services Stocks to Keep a Tab on
Lakeland Industries: Based in Huntsville, AL, the company is engaged in providing industrial protective clothing and accessories, including firefighting and heat protective gear and chemical protective suits for the industrial and public protective clothing market. LAKE is benefiting from an increase in demand for the fire service product line. Also, significant contributions from the acquisitions of Veridian and LHD Group also bode well for it.
In the past 60 days, estimates for this Zacks Rank #1 (Strong Buy) company’s earnings have increased more than 100% for fiscal 2026 (ending January 2026). Although shares of Lakeland Industries lost 18.8% in the past year, they rose 16.3% in the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.
Price and Consensus: LAKE
Resideo Technologies: Based in Scottsdale, AZ, REZI is engaged in producing and offering home comfort, safety and security, and energy management products under brands including Resideo, Braukmann and First Alert. Resideo Technologies is gaining from strong demand for First Alert SC5 connected smoke and carbon monoxide detectors. Also, continued focus on product development and innovation bodes well for the company.
The Zacks Consensus Estimate for Resideo Technologies’ 2025 earnings has remained steady in the past 60 days. Shares of this Zacks Rank #1 company have surged around 89% in the past year.
Price and Consensus: REZI
NAPCO Security: Based in Amityville, NY, the company provides electronic security systems to commercial, industrial, residential, institutional and government customers. NAPCO Security is benefiting from solid growth in equipment revenues, driven by strong demand for door-locking products. Also, the company’s focus on expanding recurring service revenues (RSR) is likely to be beneficial moving ahead.
In the past 60 days, estimates for NSSC’s earnings have increased 4.4% for fiscal 2026 (ending June 2026). This Zacks Rank #2 (Buy) company has gained 16.2% in the past year.
Price and Consensus: NSSC
ADT: Based in Boca Raton, FL, the company offers security and smart home solutions, including smart security cameras, burglar & life safety alarms and smart home automation systems to residential customers and small businesses. ADT is gaining from strength in the Monitoring and related services (M&S) business, driven by an increase in average prices. Also, the company’s strategic initiatives, innovation and operational excellence bode well.
The Zacks Consensus Estimate for ADT’s 2025 earnings has remained steady in the past 60 days. Shares of this Zacks Rank #3 (Hold) company have gained 4.6% in a year.
Price and Consensus: ADT