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BRC vs. ALLE: 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 Brady (BRC - Free Report) and Allegion (ALLE - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Brady has a Zacks Rank of #2 (Buy), while Allegion has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that BRC likely has seen a stronger improvement to its earnings outlook than ALLE has recently. 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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

BRC currently has a forward P/E ratio of 14.30, while ALLE has a forward P/E of 19.15. We also note that BRC has a PEG ratio of 2.04. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ALLE currently has a PEG ratio of 2.37.

Another notable valuation metric for BRC is its P/B ratio of 2.71. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ALLE has a P/B of 11.64.

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

BRC has seen stronger estimate revision activity and sports more attractive valuation metrics than ALLE, so it seems like value investors will conclude that BRC is the superior option right now.


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