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ASAZY vs. ALRM: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Security and Safety Services sector have probably already heard of Assa Abloy AB (ASAZY - Free Report) and Alarm.com Holdings (ALRM - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Assa Abloy AB is sporting a Zacks Rank of #2 (Buy), while Alarm.com Holdings has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ASAZY has an improving earnings outlook. However, value investors will care about much more than just this.

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.

ASAZY currently has a forward P/E ratio of 18.02, while ALRM has a forward P/E of 32.33. We also note that ASAZY has a PEG ratio of 1.60. 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. ALRM currently has a PEG ratio of 2.16.

Another notable valuation metric for ASAZY is its P/B ratio of 3. 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, ALRM has a P/B of 5.40.

These metrics, and several others, help ASAZY earn a Value grade of B, while ALRM has been given a Value grade of D.

ASAZY 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 ASAZY is likely the superior value option right now.


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Assa Abloy AB (ASAZY) - free report >>

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