Allegion plc (NYSE:) currently seems to be a smart choice for investors seeking exposure in the security services space. Solid fundamentals and positive revision in earnings estimates are reflective of healthy growth potential of the company.
The Dublin, Ireland-based company currently carries a Zacks Rank #2 (Buy). It belongs to the Zacks Security and Safety Services industry, which is a sub-industry of the Zacks Industrial Products sector. We believe that growing awareness about security and safety of workers and facility infrastructure, growth in industrial activities in emerging nations, the need to deal with ever-increasing fraudulent activities, and others are aiding security and safety service providers.
Below we discussed why investing in Allegion will be a smart choice.
Share Price Performance, Earnings Outlook: Market sentiments seem to be working in favor of the company over time. In the past three months, Allegion’s share price has gained 18.7% compared with the industry’s growth of 8.9%.
Notably, in the third quarter of 2019, the company’s earnings surpassed the Zacks Consensus Estimate by 10.53% and grew 19.5% from the year-ago quarter. The bottom-line results benefited from solid sales and improved operating income.
For 2019, the company raised earnings per share projection to $4.85-$4.90 from $4.80-$4.90 stated previously. It expects the bottom line to gain from pricing actions and greater operational efficacy.
In the past 30 days, earnings estimates for 2019 and 2020 have been revised upward, reflecting positive sentiments about the company’s growth prospects. Currently, the consensus estimate for earnings for Allegion’s is pegged at $4.88 for 2019 and $5.35 for 2020, mirroring growth of 1% and 1.1% from the respective 30-day-ago figures.
Allegion PLC Price and Consensus
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure
here or
remove ads
.
Allegion PLC price-consensus-chart | Allegion PLC Quote
Top-Line Prospects: The company has a diverse customer base in various end markets — including commercial office, education, residential, healthcare and government. It offers products ranging from doors and door systems, electronic security products, biometric and mobile access control systems, locks, locksets, exit devices, portable locks, and workforce productivity systems and other accessories. Such diversification is a boon for Allegion.
In third-quarter 2019, the company’s revenues increased 5.2% year over year or grew 6.4% on an organic basis. The top-line results gained from strengthening non-residential business and pricing benefits.
For the rest of 2019, the company expects to gain from healthy demand in the electronic business, expanded product portfolio, technical partnerships and a large customer base. For 2019, it anticipates revenue growth of 4.5-5.5% year over year, both on an organic and reported basis.
Shareholder-Friendly Policies: The company remains committed to rewarding shareholders handsomely through dividend payments and share buybacks. During the first nine months of 2019, it bought back shares worth $179.7 million and distributed dividends worth $75.5 million.
Notably, the company hiked its quarterly dividend payout by 29% in February 2019.
Other Key Picks
Some better-ranked stocks in the sector are Tennant Company (NYSE:) , Dover Corporation (NYSE:) and The Middleby Corporation (NASDAQ:) . While Tennant currently sports a Zacks Rank #1 (Strong Buy), Dover and Middleby carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, earnings estimates for these companies have improved for the current year. Further, positive earnings surprise for the last reported quarter was 40% for Tennant, 4.58% for Dover and 5.52% for Middleby.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure
here or
remove ads
.
