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BRC vs. ALLE: Which Stock Is the Better Value Option?

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Investors interested in Security and Safety Services stocks are likely familiar with Brady (BRC - Free Report) and 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.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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 has a Zacks Rank of #2 (Buy), while Allegion has a Zacks Rank of #4 (Sell) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BRC is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.

BRC currently has a forward P/E ratio of 16.83, while ALLE has a forward P/E of 25.79. We also note that BRC has a PEG ratio of 2.40. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ALLE currently has a PEG ratio of 3.72.

Another notable valuation metric for BRC is its P/B ratio of 2.92. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, ALLE has a P/B of 13.55.

These are just a few of the metrics contributing to BRC's Value grade of B and ALLE's Value grade of C.

BRC is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that BRC is likely the superior value option right now.


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