ALRM or ASAZY: Which Is the Better Value Stock Right Now?
Investors interested in Security and Safety Services stocks are likely familiar with Alarm.com Holdings (ALRM) and Assa Abloy AB (ASAZY). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.
Right now, Alarm.com Holdings is sporting a Zacks Rank of #2 (Buy), while Assa Abloy AB has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ALRM has an improving earnings outlook. However, value investors will care about much more than just this.
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.
ALRM currently has a forward P/E ratio of 17.95, while ASAZY has a forward P/E of 21.02. We also note that ALRM has a PEG ratio of 1.41. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ASAZY currently has a PEG ratio of 2.06.
Another notable valuation metric for ALRM is its P/B ratio of 2.9. 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, ASAZY has a P/B of 3.31.
These are just a few of the metrics contributing to ALRM's Value grade of B and ASAZY's Value grade of C.
ALRM sticks out from ASAZY in both our Zacks Rank and Style Scores models, so value investors will likely feel that ALRM is the better option right now.
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Assa Abloy AB (ASAZY) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
