Here's Why Investors Should Bet on Allegion (ALLE) Stock Now

Zacks Equity Research

28 June 2024 at 12:16 pm·4-min read

Allegion plc ALLE is benefiting from strength in the Allegion International segment, acquired assets and shareholder-friendly moves.

Let us delve into the factors that make this Zacks Rank #2 (Buy) company a smart investment choice at the moment.

Growth Catalysts

Business Strength: Allegion is poised to gain from strong momentum in the Allegion International segment. An increase in demand for electronic security products, driven by growing awareness about the security and safety of people and infrastructure, is aiding the segment. Higher adoption of advanced technologies and solutions in the electronics security products market is expected to drive Allegion’s performance in the quarters ahead.

Driven by strength across the business, the company expects the Allegion International segment’s revenues to increase in the range of 1.5-3.5% year over year in 2024. Allegion’s total revenues are also anticipated to rise in the band of 1.5-3.5% in 2024 from the year-ago levels, while organic sales are expected to increase in the range of 1-3%. We expect the company’s sales to be up 2.5% on a year-over-year basis.

Accretive Acquisitions: Over time, ALLE has steadily strengthened its business through acquisitions. In the first quarter, acquisitions boosted the company’s sales by 0.3%. In June 2024, the company acquired Krieger Specialty Products. The addition of Krieger’s expertise in specialty solutions will enable Allegion to strengthen its door and frame portfolio. Also, in the same month, it purchased Unicel Architectural Corp. The inclusion of Unicel’s proficiency in glass and building envelope solutions will enable the company to boost its product portfolio within the non-residential business. Both the acquired businesses have been incorporated into the Allegion Americas segment.

In March 2024, Allegion completed the acquisition of Montajes Electronics Dorcas S.L. (Dorcas), which has been incorporated into the Allegion International segment. The inclusion of Dorcas’ expertise in electric strikes and lock solutions, coupled with its strong innovation capabilities, will enable Allegion to boost its security products portfolio. It will also help the company to expand its presence in lucrative end markets like healthcare and education. Allegion also acquired Livingston, Scotland-based Boss Door Controls in February, thereby expanding its U.K. business with a complementary portfolio and broader channel access. Boss Door Controls is part of the Allegion International segment.

Rewards to Shareholders: Allegion continues to increase shareholders’ value through dividend payments and share repurchases. Dividends paid out totaled $42.1 million in the first three months of 2024, reflecting an increase of 6.9% year over year. In the same period, Allegion repurchased shares for $40 million. In 2023, the company disbursed dividends worth $158.7 million and bought back shares for $59.9 million. In February, Allegion announced a 7% hike in its quarterly dividend rate, which is now 48 cents per share.

Northward Estimate Revision: The Zacks Consensus Estimate for ALLE’s 2024 earnings has been revised 0.7% upward in the past 60 days.

Allegion PLC Price and Consensus

Allegion PLC price-consensus-chart | Allegion PLC Quote

Other Stocks to Consider

Some other top-ranked companies from the Industrial Products sector are discussed below:

Applied Industrial Technologies, Inc. AIT presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 8.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for AIT’s fiscal 2024 earnings has improved 0.9% in the past 60 days. The stock has risen 11.8% in the year-to-date period.

Belden Inc. BDC currently carries a Zacks Rank of 2 and has a trailing four-quarter earnings surprise of 14.7%, on average.

The consensus estimate for BDC’s 2024 earnings has increased 8.3% in the past 60 days. Shares of Belden have gained 19.2% in the year-to-date period.

Crane Company CR presently carries a Zacks Rank of 2. CR delivered a trailing four-quarter earnings surprise of 15.2%, on average.

The Zacks Consensus Estimate for CR’s 2024 earnings has increased 0.8% in the past 60 days. Its shares have gained 22.5% in the year-to-date period.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report

Belden Inc (BDC) : Free Stock Analysis Report

Crane Company (CR) : Free Stock Analysis Report

Allegion PLC (ALLE) : Free Stock Analysis Report

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Zacks Investment Research

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Here's Why Investors Should Bet on Allegion (ALLE) Stock Now