Back to top

Image: Bigstock

Here's Why it's Worth Investing in Allegion (ALLE) Stock Now

Read MoreHide Full Article

Allegion plc (ALLE - Free Report) currently boasts robust prospects on strength across its business, solid product portfolio, acquired asset, restructuring actions and a sound capital-deployment strategy.

Notably, the Zacks Rank #2 (Buy) company has a market capitalization of $10.5 billion. In the past three months, it has gained 9% compared with the industry’s growth of 17.6%.

Let’s delve into the factors that make investment in the company a smart choice at the moment.

Strength in Businesses: Allegion is poised to benefit from its strong residential security business, driven by healthy backlog and strength across the new construction and retail end markets. The company’s electronic products business is expected to be a long-term growth driver, supported by a solid product portfolio, supply chain strength and a large customer base. Further, the acquisition of Yonomi (January 2021) will enable Allegion to boost its smart-home solutions through its major brands like Schlage.

Initiatives: The company’s pricing and productivity initiatives, along with its restructuring actions, are also likely to beneficial in the quarters ahead. Also, it has taken several cost-control measures including the reduction of discretionary expenses, eliminating unnecessary investments, and restructuring and re-prioritization of its capital expenditure. For 2020, the company expects to have realized $80 million of cost reduction on a year-over-year basis.

Rewards to Shareholders: It remains committed to rewarding shareholders through dividend payouts and share buybacks. In February 2020, the company hiked its quarterly dividend rate by 19%. Also, in the first nine months of 2020, it paid out dividends worth $88.3 million, higher than $75.5 million paid out in the year-ago comparable period. Moreover, it repurchased shares worth $94.1 million in the first nine months of 2020.

Estimate Revisions: In the past 60 days, the Zacks Consensus Estimate for Allegion’s 2020 earnings has trended up from $4.79 to $4.80 on one upward estimate revision against none downward. In addition, the consensus estimate for 2021 earnings has increased from $4.60 to $4.62 on one upward estimate revision against none downward.

Other Key Picks

Some other top-ranked stocks from the same space are Lakeland Industries, Inc. (LAKE - Free Report) , Fortune Brands Home & Security, Inc. (FBHS - Free Report) and Brady Corporation (BRC - Free Report) . While Lakeland sports a Zacks Rank #1 (Strong Buy), Fortune Brands and Brady carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lakeland delivered a trailing four-quarter positive earnings surprise of 296.99%, on average.

Fortune Brands delivered a trailing four-quarter positive earnings surprise of 23.02%, on average.

Brady delivered a trailing four-quarter positive earnings surprise of 2.95%, on average.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>