Financial Survey: Masco (NYSE:MAS) and Allegion (NYSE:ALLE)

Allegion (NYSE:ALLE) and Masco (NYSE:MAS) are both large-cap industrials companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, analyst recommendations, risk, earnings and dividends.

Risk & Volatility

Allegion has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, Masco has a beta of 1.3, suggesting that its share price is 30% more volatile than the S&P 500.

Valuation & Earnings

This table compares Allegion and Masco”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Allegion	$4.07 billion	3.21	$643.80 million	$7.62	20.13
Masco	$7.56 billion	1.79	$810.00 million	$4.35	15.78

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

Dividends

Allegion pays an annual dividend of $2.20 per share and has a dividend yield of 1.4%. Masco pays an annual dividend of $1.28 per share and has a dividend yield of 1.9%. Allegion pays out 28.9% of its earnings in the form of a dividend. Masco pays out 29.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Allegion has increased its dividend for 11 consecutive years and Masco has increased its dividend for 12 consecutive years. Masco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

92.2% of Allegion shares are held by institutional investors. Comparatively, 93.9% of Masco shares are held by institutional investors. 0.6% of Allegion shares are held by insiders. Comparatively, 0.6% of Masco shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Allegion	15.36%	35.41%	13.80%
Masco	11.61%	2,379.08%	17.21%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Allegion and Masco, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Allegion	0	7	2	1	2.40
Masco	1	11	7	0	2.32

Allegion currently has a consensus price target of $164.75, indicating a potential upside of 7.42%. Masco has a consensus price target of $79.56, indicating a potential upside of 15.94%. Given Masco’s higher probable upside, analysts clearly believe Masco is more favorable than Allegion.

Summary

Masco beats Allegion on 10 of the 18 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 Masco

Masco Corporation designs, manufactures, and distributes home improvement and building products in North America, Europe, and internationally. The company's Plumbing Products segment offers faucets, showerheads, handheld showers, valves, bath hardware and accessories, bathing units, shower bases and enclosures, sinks, toilets, acrylic tubs, shower trays, spas, exercise pools, and fitness systems; brass, copper, and composite plumbing system components; connected water products; thermoplastic solutions, extruded plastic profiles, specialized fabrications, and PEX tubing products; and other non-decorative plumbing products. This segment provides its products under the DELTA, BRIZO, PEERLESS, HANSGROHE, AXOR, KRAUS, EASY DRAIN, STEAMIST, ELITESTEAM, GINGER, NEWPORT BRASS, BRASSTECH, WALTEC, BRISTAN, HERITAGE, MIROLIN, HOT SPRING, CALDERA, FREEFLOW SPAS, FANTASY SPAS, ENDLESS POOLS, BRASSCRAFT, PLUMB SHOP, COBRA, COBRA PRO, and MASTER PLUMBER brands. Its Decorative Architectural Products segment offers paints, primers, specialty coatings, stains, and waterproofing products, as well as paint applicators and accessories; cabinet and door hardware, functional hardware, wall plates, hook and rail products, closet organization systems, and picture hanging accessories; decorative bath hardware, mirrors, and shower accessories and doors; and decorative indoor and outdoor lighting fixtures, ceiling fans, landscape lighting, and LED lighting systems. This segment provides its products under the BEHR, KILZ, WHIZZ, Elder & Jenks, LIBERTY, BRAINERD, FRANKLIN BRASS, KICHLER, and ÉLAN brands. It sells its products to the plumbing, heating, and hardware wholesalers; home centers and online retailers; hardware stores; electrical and landscape distributors; lighting showrooms; building supply outlets; and other mass merchandisers. Masco Corporation was incorporated in 1929 and is headquartered in Livonia, Michigan.