Allegion (ALLE) versus ADT (ADT) Financial Analysis

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for ADT and Allegion, as reported by MarketBeat.

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

Allegion has a consensus target price of $89.75, indicating a potential upside of 14.35%. Given Allegion’s higher probable upside, analysts clearly believe Allegion is more favorable than ADT.

Earnings & Valuation

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

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

Allegion has higher revenue and earnings than ADT.

Profitability

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

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

Insider & Institutional Ownership

89.5% of Allegion shares are owned by institutional investors. 1.2% of ADT shares are owned by insiders. Comparatively, 0.6% of Allegion shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

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. ADT has increased its dividend for 5 consecutive years and Allegion has increased its dividend for 2 consecutive years.

Summary

Allegion beats ADT on 8 of the 11 factors compared between the two stocks.

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.

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.

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