Advanced Drainage Systems (NYSE:WMS) vs. Allegion (NYSE:ALLE) Head-To-Head Comparison

Advanced Drainage Systems (NYSE:WMS) and Allegion (NYSE:ALLE) are both industrials companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, risk, profitability, analyst recommendations and earnings.

Valuation & Earnings

This table compares Advanced Drainage Systems and Allegion”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Advanced Drainage Systems	$3.26 billion	2.90	$426.46 million	$5.26	24.33
Allegion	$4.07 billion	3.97	$643.80 million	$8.03	23.84

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

Risk and Volatility

Advanced Drainage Systems has a beta of 1.3, meaning that its stock price is 30% more volatile than the S&P 500. Comparatively, Allegion has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for Advanced Drainage Systems and Allegion, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Advanced Drainage Systems	0	2	8	0	2.80
Allegion	0	4	5	0	2.56

Advanced Drainage Systems presently has a consensus price target of $184.40, suggesting a potential upside of 44.09%. Allegion has a consensus price target of $180.70, suggesting a potential downside of 5.62%. Given Advanced Drainage Systems’ stronger consensus rating and higher possible upside, research analysts plainly believe Advanced Drainage Systems is more favorable than Allegion.

Dividends

Advanced Drainage Systems pays an annual dividend of $0.80 per share and has a dividend yield of 0.6%. Allegion pays an annual dividend of $2.20 per share and has a dividend yield of 1.1%. Advanced Drainage Systems pays out 15.2% of its earnings in the form of a dividend. Allegion pays out 27.4% 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. Advanced Drainage Systems has raised its dividend for 1 consecutive years and Allegion has raised its dividend for 11 consecutive years. Allegion is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

89.8% of Advanced Drainage Systems shares are held by institutional investors. Comparatively, 92.2% of Allegion shares are held by institutional investors. 1.7% of Advanced Drainage Systems shares are held by insiders. Comparatively, 0.6% of Allegion shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Advanced Drainage Systems and Allegion’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Advanced Drainage Systems	12.44%	27.88%	11.76%
Allegion	15.74%	35.52%	14.06%

Summary

Allegion beats Advanced Drainage Systems on 10 of the 17 factors compared between the two stocks.

About Advanced Drainage Systems

Advanced Drainage Systems, Inc. (NYSE: WMS) manufactures water-management products for infrastructure, construction, agriculture and residential markets. Its offerings include thermoplastic corrugated pipe and related products used to manage stormwater, drainage and wastewater. The company also provides stormwater storage, treatment and infiltration systems, as well as products for onsite wastewater and septic systems through its Infiltrator Water Technologies business. Its portfolio includes solutions for projects ranging from roadways and commercial developments to residential wastewater applications.

About Allegion

Allegion plc is a global provider of security products and solutions for homes, businesses, schools, hospitals and other institutions. Its offerings include mechanical and electronic locks, access-control systems, door closers, exit devices and related door hardware. The company sells products under brands including Schlage, Von Duprin, LCN and CISA. Its solutions are used in both commercial and residential settings, with operations serving customers in North America and other markets around the world.