Here's Why You Should Retain Allegion Stock in Your Portfolio

Allegion plc ALLE has been experiencing strength in its Americas segment, driven by solid momentum in the non-residential business. The company’s acquisitions of Next Door Company and Trimco have also been driving the segment’s performance, of late. The segment’s organic revenues increased 6.4% year over year in the third quarter of 2025. 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. The segment’s organic revenues increased 3.6% year over year in the third quarter.

The company intends to strengthen and expand its businesses through buyouts. ALLE acquired Brisant and UAP Group Limited in August 2025. The addition of Brisant’s residential security solutions portfolio will enable the company to strengthen its presence in the U.K. residential market while complementing its non-residential portfolio. 

Also, the addition of UAP’s comprehensive portfolio of door hardware, backed by about 200 patents, trademarks and registered designs, will enable the company to strengthen its presence in the U.K. non-residential market. In the third quarter of 2025, acquisitions boosted the company’s sales by 3.9%.

Allegion remains committed to increasing shareholders’ value through dividend payments and share repurchases. It paid out dividends of $131.4 million in the first nine months of 2025, reflecting an increase of 4.6% year over year. In the same period, it repurchased shares for $80 million.  Also, in February 2025, Allegion announced a 6% hike in its quarterly dividend rate.

Price Performance

In the past six months, this Zacks Rank #3 (Hold) company has gained 16.4% compared with the industry’s 15.2% growth.

However, Allegion is dealing with escalating costs and expenses. During the nine months of 2025, the company witnessed a 5.1% year-over-year increase in the cost of sales due to high raw material costs. Also, selling and administrative expenses increased 11.2% year over year. The metric, as a percentage of total revenues, increased 80 basis points to 24%.

Also, the company’s highly leveraged balance sheet remains a concern. Exiting the third quarter, its long-term debt was $2.06 billion, higher than $1.98 billion at the end of 2024. Also, exiting the quarter, its total debt remained high at $2.09 billion, higher than $2 billion at the end of 2024. Considering Allegion’s high debt level, its cash and cash equivalents of $302.7 million do not look impressive.

Key Picks

Some better-ranked stocks from the same space are presented below.

Resideo Technologies, Inc. REZI presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

REZI delivered a trailing four-quarter average earnings surprise of 39.4%. In the past 60 days, the Zacks Consensus Estimate for Resideo’s 2025 earnings has been stable.

Lakeland Industries, Inc. LAKE sports a Zacks Rank of 1 at present. LAKE delivered a trailing four-quarter average earnings surprise of 106.3%. In the past 60 days, the Zacks Consensus Estimate for Lakeland’s fiscal 2025 earnings has increased 177.8%.

ADT Inc. ADT presently carries a Zacks Rank #2 (Buy). ADT delivered a trailing four-quarter average earnings surprise of 7.7%. In the past 60 days, the Zacks Consensus Estimate for its 2025 earnings has increased 1.2%.

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This article originally published on Zacks Investment Research (zacks.com).

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