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

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Allegion plc (ALLE - Free Report) currently boasts robust prospects on strength in its end markets, solid product portfolio, acquired assets and a sound capital-deployment strategy.

Notably, the Zacks Rank #2 (Buy) company has a market capitalization of $12.4 billion. In the past three months, it has gained 27.8% compared with the industry’s growth of 6.5%.

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

Solid End Markets: Allegion has been witnessing strong momentum in its residential businesses, backed by solid recovery across the new home construction and retail end markets. Also, in the quarters ahead, strength in the company’s Germanic, Global Portable Security and SimonsVoss businesses is likely to be a tailwind. For 2021, the company expects organic revenues to grow in the range of 2-3% on a year-over-year basis.

Acquisition Benefits: The company focuses on adding complementary assets to its portfolio. For instance, in January 2021, it completed the buyout of technology company — Yonomi. The buyout will allow Allegion to further develop its smart-home solutions through major brands like Schlage.

Rewards to Shareholders: It remains committed to rewarding shareholders through share-buyback programs and dividend payouts apart from using its fund for acquiring lucrative businesses. In 2020 and in the first quarter of 2021, it paid out dividends worth $117.3 million and $32.5 million, respectively. Also, in February 2021, it announced a 13% hike in its quarterly dividend rate. In addition, the company repurchased shares worth $208.8 million and $149.7 million in 2020 and in the first quarter of 2021, respectively.

Initiatives: The company’s focus on pricing and productivity initiatives, along with its restructuring actions, is likely to continue improving margins and its financial performance in 2021. Also, several cost-control measures will help it maintain a healthy margin performance amid the coronavirus crisis. In first-quarter 2021, its adjusted operating margin increased 30 basis points year over year, backed by benefits from restructuring and cost reduction actions.

In the past 30 days, the Zacks Consensus Estimate for its 2021 earnings has trended up from $4.83 to $5.09 on three upward estimate revisions against none downward. Also, the same for 2022 earnings has increased from $5.26 to $5.51 on three upward estimate revisions against none downward.

Other Stocks to Consider

Some other top-ranked stocks are NortonLifeLock Inc. (NLOK - Free Report) , Johnson Controls International plc (JCI - Free Report) and Lakeland Industries, Inc. (LAKE - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NortonLifeLock delivered an earnings surprise of 16.88%, on average, in the trailing four quarters.

Johnson Controls delivered an earnings surprise of 12.93%, on average, in the trailing four quarters.

Lakeland delivered an earnings surprise of 230.73%, on average, in the trailing four quarters.

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