Allegion plc ALLE is well-positioned to benefit from strength in the Allegion Americas segment and accretive acquisitions. The company’s commitment to reward its shareholders also bodes well.

Headquartered in Dublin, Ireland, Allegion is a leading global provider of security products and solutions for business and domestic purposes. The company offers an extensive portfolio of mechanical and electronic security products, including doors and door systems, electronic security products, biometric and mobile access control systems, locks, locksets, exit devices, portable locks, workforce productivity systems and other accessories. Shares of ALLE have gained 28.1% in the past year.

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

Business Strength: Allegion is seeing strong momentum across its segments. Stable demand across end markets like education, healthcare, government, hospitality and retail and the recent acquisition of Krieger and Unicel within the non-residential business are driving the Allegion Americas segment.  The increase in demand for residential products also bodes well. 

Further, an increase in demand for electronic security products, driven by growing awareness about the security and safety of people and infrastructure, is aiding the Allegion International segment. Increased adoption of advanced technologies and solutions in the electronics security products market, such as wireless locks and mobile-enabled smart locks, is expected to drive Allegion’s performance in the quarters ahead.

Expansion Initiatives: The company solidified its product portfolio and leveraged business opportunities by adding assets. In the third quarter of 2024, acquisitions boosted the company’s sales by approximately 1.9%. In June 2024, it 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 it to boost its product portfolio within the non-residential business. Both the acquired businesses have been incorporated into the Allegion Americas segment. 

Also, in March 2024, Allegion completed the acquisition of Spain-based 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, enabled ALLE to boost its security products portfolio. It also helped the company to expand its presence in lucrative end markets like healthcare and education. It also acquired Livingston, Scotland-based Boss Door Controls in February 2024, 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 is committed to returning value to shareholders through share repurchases and dividends. Dividends paid out totaled $125.6 million in the first nine months of 2024, reflecting an increase of 5.4% year over year. In the same period, Allegion repurchased shares for $120 million.

Other Stocks to Consider

Some other top-ranked companies are discussed below.

Graham Corporation GHM currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

GHM delivered a trailing four-quarter average earnings surprise of 101.9%. In the past 60 days, the Zacks Consensus Estimate for Graham’s fiscal 2025 earnings has increased 8.4%.

RBC Bearings Incorporated RBC presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 2.5%.

In the past 60 days, the consensus estimate for RBC’s fiscal 2025 earnings has increased 0.5%.

Kadant Inc. KAI presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 17.2%. 

The Zacks Consensus Estimate for KAI’s 2024 earnings has increased 1.8% in the past 60 days.

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