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

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Investors interested in Security and Safety Services stocks are likely familiar with ADT (ADT - Free Report) and Brady (BRC - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

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 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.

ADT and Brady are both sporting a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is only part of the picture 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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

ADT currently has a forward P/E ratio of 8.65, while BRC has a forward P/E of 20.63. We also note that ADT has a PEG ratio of 1.07. 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. BRC currently has a PEG ratio of 2.95.

Another notable valuation metric for ADT is its P/B ratio of 2.12. 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, BRC has a P/B of 3.13.

Based on these metrics and many more, ADT holds a Value grade of A, while BRC has a Value grade of C.

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


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