Financial Comparison: Allegion (NYSE:ALLE) vs. Alarm.com (NASDAQ:ALRM)

Allegion (NYSE:ALLE) and Alarm.com (NASDAQ:ALRM) are both industrials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.

Risk and Volatility

Allegion has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500. Comparatively, Alarm.com has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500.

Insider & Institutional Ownership

92.2% of Allegion shares are owned by institutional investors. Comparatively, 91.7% of Alarm.com shares are owned by institutional investors. 0.6% of Allegion shares are owned by company insiders. Comparatively, 5.8% of Alarm.com shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Allegion	15.24%	35.41%	13.53%
Alarm.com	12.36%	14.99%	6.24%

Analyst Ratings

This is a summary of recent recommendations for Allegion and Alarm.com, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Allegion	0	8	2	1	2.36
Alarm.com	1	3	0	0	1.75

Allegion currently has a consensus price target of $164.00, suggesting a potential upside of 22.10%. Alarm.com has a consensus price target of $47.50, suggesting a potential downside of 0.21%. Given Allegion’s stronger consensus rating and higher probable upside, analysts clearly believe Allegion is more favorable than Alarm.com.

Earnings and Valuation

This table compares Allegion and Alarm.com”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Allegion	$4.07 billion	2.84	$643.80 million	$7.32	18.35
Alarm.com	$1.04 billion	2.27	$132.57 million	$2.41	19.75

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

Summary

Allegion beats Alarm.com on 13 of the 15 factors compared between the two stocks.

About Allegion

Allegion plc manufactures and sells mechanical and electronic security products and solutions worldwide. The company offers door controls and systems and exit devices; locks, locksets, portable locks, and key systems and services; electronic security products and access control systems; time, attendance, and workforce productivity systems; doors, accessories, and other. It also provides services and software, which includes inspection, maintenance, and repair services for its automatic entrance solutions; and software as a service, including access control, IoT integration, and workforce management solutions, as well as aftermarket services, design and installation offerings, and locksmith services. The company sells its products and solutions to end-users in commercial, institutional, and residential facilities, including education, healthcare, government, hospitality, retail, commercial office, and single and multi-family residential markets under the CISA, Interflex, LCN, Schlage, SimonsVoss, and Von Duprin brands. It sells its products and solutions through distribution and retail channels, such as specialty distribution, e-commerce, and wholesalers, as well as through various retail channels comprising do-it-yourself home improvement centers, online and e-commerce platforms, and small specialty showroom outlets. Allegion plc was incorporated in 2013 and is headquartered in Dublin, Ireland.

About Alarm.com

Alarm.com Holdings, Inc. provides various Internet of Things (IoT) and solutions for residential, multi-family, small business, and enterprise commercial markets in North America and internationally. The company operates through two segments, Alarm.com and Other. It offers solutions to control and monitor security systems, as well as to IoT devices, including door locks, garage doors, thermostats, and video cameras; and video monitoring and analytics solutions, such as video analytics, escalated events, video doorbells, intelligent integration, live streaming, secure cloud storage, and video alerts. The company also provides scenes, video analytics triggers, thermostat schedules, responsive savings, precision comfort, energy usage monitoring, places feature, whole home water safety, and solar monitoring solutions, as well as heating, ventilation, and air conditioning monitoring services. In addition, it offers demand response programs, commercial grade video, commercial video analytics, access control, cell connectors, enterprise dashboard and multi-site management, energy savings, protection for valuables and inventory, temperature monitoring, and daily safeguard solutions. Further, the company provides a permission-based online portal that provides account management, sales, marketing, training, and support tools; a unified interface that displays key operational and customer experience indicators, including technician performance, system reliability and customer engagement metrics; installation and support services; MobileTech Application and Remote Toolkit; video health reports; smart gateway; AI-powered enhancements to professional monitoring and false alarm reduction; Web services and business intelligence; sales, marketing, and training services; and home builder programs. Additionally, it offers electric utility grid and water management, indoor gunshot detection, and health and wellness and data-rich emergency response solutions. The company was founded in 2000 and is based in Tysons, Virginia.