Allegion (ALLE) vs. ADT (ADT) Critical Comparison

Allegion (NYSE: ALLE) and ADT (NYSE:ADT) are both mid-cap industrial products companies, but which is the better business? We will compare the two businesses based on the strength of their risk, profitability, earnings, dividends, institutional ownership, analyst recommendations and valuation.

Earnings and Valuation

This table compares Allegion and ADT’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Allegion $2.24 billion 3.33 $229.10 million $3.52 22.30
ADT N/A N/A N/A ($0.50) -25.28

Allegion has higher revenue and earnings than ADT. ADT is trading at a lower price-to-earnings ratio than Allegion, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

89.5% of Allegion shares are held by institutional investors. 0.6% of Allegion shares are held by company insiders. Comparatively, 1.2% of ADT shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Allegion pays an annual dividend of $0.64 per share and has a dividend yield of 0.8%. ADT does not pay a dividend. Allegion pays out 18.2% of its earnings in the form of a dividend. Allegion has raised its dividend for 5 consecutive years and ADT has raised its dividend for 2 consecutive years.

Profitability

This table compares Allegion and ADT’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Allegion 14.37% 154.50% 15.31%
ADT N/A N/A N/A

Analyst Ratings

This is a breakdown of recent ratings for Allegion and ADT, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Allegion 0 1 4 0 2.80
ADT 0 0 0 0 N/A

Allegion currently has a consensus price target of $89.75, suggesting a potential upside of 14.35%. Given Allegion’s higher possible upside, research analysts plainly believe Allegion is more favorable than ADT.

Summary

Allegion beats ADT on 11 of the 13 factors compared between the two stocks.

About Allegion

Allegion Public Limited Company is a provider of security products and solutions. The Company offers a portfolio of mechanical and electronic security products across a range of brands. Its segments include Americas; Europe, Middle East, India and Africa (EMEIA), and Asia Pacific. Its products include door closers and controls; door and door frames (steel); electronic security products; electronic and biometric access control systems; exit devices; locks, locksets, portable locks and key systems; time, attendance and workforce productivity systems, and other accessories. It sells a range of security products and solutions for end users in commercial, institutional and residential facilities across the world, including into the education, healthcare, government, hospitality, commercial office and single and multi-family residential markets. As of December 31, 2016, it manufactured and sold mechanical and electronic security products and solutions in approximately 130 countries.

About ADT

ADT Inc. is a provider of monitored security, interactive home and business automation and related monitoring services in the United States and Canada. The Company offers a range of products home security systems, home automation, security cameras, fire, home and safety, and monitoring services. It also offers residential, commercial, and multi-site customers a comprehensive set of burglary, video, access control, fire and smoke alarm, and medical alert solutions. Its 24/7 monitoring capabilities are enabled by 12 monitoring centers.

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