4 Stocks to Gain From the Thriving Security and Safety Industry

Zacks2024-12-04

The Zacks Security and Safety Services industry is well-positioned to gain from the increasing demand for products and solutions, driven by rising awareness about the security and safety of people and...

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The growing demand for cybersecurity products is also benefiting many participants within the industry.Enhanced research and development efforts, backed by government support, augur well for the industry’s near-term prospects. Companies like Allegion plc ALLE, MSA Safety Incorporated MSA, ADT Inc. ADT and Alarm.com Holdings, Inc. ALRM are a few industry participants that may capitalize on these opportunities.3 Security & Safety Services Industry Trends in Focus","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4023":"应用软件","SDS":"两倍做空标普500ETF","IE0034235188.USD":"PINEBRIDGE GLOBAL FOCUS EQUITY \"A\" (USD) ACC","BK4192":"特殊消费者服务","ALRM":"Alarm.com Holdings, Inc.","BK4534":"瑞士信贷持仓","BK4585":"ETF&股票定投概念","MSA":"Mine Safety Appliances Co","IPS":"SPDR S&P International Consumer","BK4165":"安全和报警服务","LU1815336091.USD":"THREADNEEDLE (LUX) GLOBAL SMALLER COMPANIES \"AUP\" (USD) INC","OEF":"标普100指数ETF-iShares","ADT":"Adt Inc.","SH":"标普500反向ETF","BK4559":"巴菲特持仓",".SPX":"S&P 500 Index","OEX":"标普100","BK4588":"碎股","LU2125909759.SGD":"Natixis Thematics Safety H-R/A SGD","BK4550":"红杉资本持仓","LU0757428866.USD":"THREADNEEDLE (LUX) GLOBAL SMALLER COMPANIES \"AE\" (USD) ACC","LU2125909916.SGD":"Natixis Thematics Safety R/A SGD","LU1923622291.USD":"Natixis Thematics Safety R/A USD","BK4086":"建筑产品","SSO":"两倍做多标普500ETF","LU0728928796.USD":"abrdn SICAV I - GLOBAL SMALL&MID-CAP SDG HORIZONS EQUITY \"A\" (USD) ACC","BK4143":"办公服务与用品","BK4581":"高盛持仓","SPXU":"三倍做空标普500ETF","LU0053671581.USD":"摩根大通美国小盘成长股 A(dist)","BK4504":"桥水持仓","VOO":"Vanguard标普500ETF","IVV":"标普500指数ETF","UPRO":"三倍做多标普500ETF","ALLE":"Allegion PLC","SPY":"标普500ETF"},"translate_title":"4只股票将从蓬勃发展的安保和安全行业中受益","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"MSA":1,"ALLE":1,"ALRM":1,"IPS":1,"ADT":0.9,"VOO":0.72,"SPY":0.72,"UPRO":0.6,"SSO":0.6,"SPXU":0.6,"SH":0.6,"SDS":0.6,"OEX":0.6,"OEF":0.6,".SPX":0.6,"IVV":0.6,"ESmain":0.6},"content_text":"The Zacks Security and Safety Services industry is well-positioned to gain from the increasing demand for products and solutions, driven by rising awareness about the security and safety of people and infrastructure. The growing demand for cybersecurity products is also benefiting many participants within the industry.\nEnhanced research and development efforts, backed by government support, augur well for the industry’s near-term prospects. Companies like Allegion plc ALLE, MSA Safety Incorporated MSA, ADT Inc. ADT and Alarm.com Holdings, Inc. ALRM are a few industry participants that may capitalize on these opportunities.\nIndustry Description\nThe Zacks Security and Safety Services industry comprises firms that provide sophisticated and interactive security solutions and related services, which are meant to be used for residential, commercial and institutional purposes. A few industry players develop electrical weapons for personal defense and military, federal, law enforcement and private security. Some of them provide solutions for the recovery of stolen vehicles, wireless communication devices, equipment for the safety of facility infrastructure and employees and products for detecting hazards. A few players provide a variety of services to automobile owners and insurance companies. The industry serves customers from various end markets, including manufacturing, electronics, hospitality, education, construction, telecommunications, aerospace and medical.\n3 Security & Safety Services Industry Trends in Focus\nHealthy Demand for Security and Safety Services: Growing instances of terrorism and criminal activities with concerns related to the ever-increasing fraudulent activities are promoting demand for security and safety services. To enhance the safety and surveillance of people or assets, governments, commercial operations, communities and other establishments across the world are rapidly deploying IP-based cameras. This is acting as a key growth driver for the industry. With growing urbanization, the increasing requirement to ensure the safety and security of infrastructure at offices, factories and residential buildings is aiding industry participants. Also, with rising instances of hacking, the industry is seeing higher demand for Internet security products and services like firewalls, intrusion detection systems (IDS) and intrusion prevention systems (IPS). People’s preference for purchasing products through e-commerce platforms also opened up opportunities for industry players.Other Favorable Trends: Increases in budgets and funds from governments have invited several big players to make significant investments in the research and development of advanced products and services. Government and law enforcement agencies in the United States and Canada are directly working with industry participants to strengthen the security infrastructure of smart cities.High Debt Levels: Industry participants constantly focus on innovation, product upgrades and the development of new products to cater to the changing customer needs and stay competitive, making steady investments necessary. While this augurs well for the industry’s long-term growth, hefty investments in research and development often leave companies with highly leveraged balance sheets. The industry’s long-term debt/capital ratio is currently 0.61, higher than 0.48 of the sector.\nZacks Industry Rank Indicates Bright Prospects\nThe Zacks Security and Safety Services industry, housed within the broader Industrial Products sector, currently carries a Zacks Industry Rank #59. This rank places it in the top 24% of more than 250 Zacks industries.The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates robust near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.The industry’s positioning in the top 50% of the Zacks-Ranked industries is a result of the solid earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are putting more faith in this group's earnings growth potential. The industry’s earnings estimates for 2024 have increased 0.7% over the past year.Given the bullish near-term prospects of the industry, we will present a few stocks that you may want to consider for your portfolio. But it is worth taking a look at the industry’s shareholder returns and current valuation first.\nIndustry Outperforms Sector & S&P 500\nThe Zacks Security and Safety Services industry has outperformed both the broader sector and the Zacks S&P 500 composite index in the past year.Over this period, the industry has moved up 64.3% compared with the sector’s and the S&P 500 Index’s increase of 32.8% and 32.4%, respectively.\nOne-Year Price Performance\n\nIndustry's Current Valuation\nOn the basis of forward P/E (F12M), which is a commonly used multiple for valuing security and safety services stocks, the industry is currently trading at 33.38X compared with the S&P 500’s and the sector’s 22.58X and 22.27X, respectively.Over the past five years, the industry has traded as high as 33.38X, as low as 14.16X and at the median of 22.45X, as the chart below shows:\nPrice-to-Earnings Ratio\nPrice-to-Earnings Ratio\n\nSecurity and Safety Services Stocks Leading the Pack\nAlarm.com: Based in Tysons, VA the company is engaged in providing Internet of Things (IoT) and solutions for multi-family, residential and small businesses in North America and globally. Strengthening demand for products and solutions and buyout activities have been driving the company’s performance of late. A favorable product mix and improved supply-chain conditions are likely to be beneficial moving ahead.In the past 60 days, estimates for ALRM’s earnings have increased 7.3% for 2024. This Zacks Rank #1 (Strong Buy) company’s shares have gained 12.6% in the past year.  You can see  the complete list of today’s Zacks #1 Rank stocks here.. \nPrice and Consensus: ALRM\n\nAllegion: The Dublin, Ireland-based company is a leading provider of mechanical and electronic security products, including doors and door systems, electronic security products and biometric and mobile access control systems. It is well-positioned to benefit from strength in its Americas and International segments, driven by an increase in demand for electronic security products. 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 ALLE’s performance in the quarters ahead.In the past 60 days, estimates for this Zacks Rank #2 (Buy) company’s earnings have increased 2.4% for 2024. Its shares have risen 31.2% in the past year.\nPrice and Consensus: ALLE\n\nMSA Safety: The company is engaged in the development, manufacture and supply of safety products that protect people and facility infrastructures. Its core products include self-contained breathing apparatus, fixed gas and flame detection systems, air-purifying respirators and gas masks, among others. Strengthening demand for its fire service and detection products has been driving the company’s performance of late. A favorable product mix and improved supply-chain conditions are likely to be beneficial moving ahead.The company’s earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 5.8%. Shares of the Zacks Rank #2 company gained 3.5% in the year-to-date period.\nPrice and Consensus: MSA\n\nADT: Based in Boca Raton, FL, the company offers security and smart home solutions including smart security cameras, burglar & life safety alarms and smart home automation systems to residential customers and small businesses. ADT is gaining from strength in the Consumer and Small Business segment, driven by strong customer demand for monitoring and related services. Also, the company’s strategic initiatives, innovation and operational excellence bode well.The Zacks Consensus Estimate for ADT’s 2024 earnings has increased 12.2% in the past 60 days. Shares of the Zacks Rank #2 company have gained 22.7% in a year.\nPrice and Consensus: ADT\n\nWant 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\nADT Inc. (ADT) : Free Stock Analysis Report\nAllegion PLC (ALLE) : Free Stock Analysis Report\nMSA Safety Incorporporated (MSA) : Free Stock Analysis Report\nAlarm.com Holdings, Inc. (ALRM) : Free Stock Analysis Report\nTo read this article on Zacks.com click here.\nZacks Investment Research","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.4","shortVersion":"4.29.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2488929910"}