4 Security & Safety Stocks to Consider on Prospering Industry Trends

The Zacks Security and Safety Services industry is well-positioned to benefit from strong demand for products and solutions with growing awareness about the security and safety of people and infrastructure. Higher research and development activities supported by governments also augur well for the industry’s near-term prospects.

The increase in demand for cybersecurity products supports several industry participants’ prospects as well. Companies like Allegion plc ALLE, Resideo Technologies, Inc. REZI, Napco Security Technologies, Inc. NSSC and Intellicheck, Inc. IDN are a few industry participants that are likely to capitalize on these opportunities.

Industry Description

The 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 the companies 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.

Trends Shaping the Future of the Security & Safety Services Industry

Solid Demand for Security and Safety Services: Growing instances of terrorism and criminal activities, along with concerns related to the ever-increasing fraudulent activities, are driving 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 and intrusion prevention systems. People’s preference for purchasing products through e-commerce platforms has also opened up opportunities for industry players.

Other Tailwinds: Strong budgetary provisions and funds from governments have encouraged 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. This has been helping the industry players to develop enhanced products and solutions, thereby catering to the needs of customers.

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, much higher than 0.27 of the Zacks S&P 500 composite index.

Zacks Industry Rank Indicates Solid Prospects

The Zacks Security and Safety Services industry, housed within the broader Industrial Products sector, currently carries a Zacks Industry Rank #97. This rank places it in the top 40% of 244 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.

We will present a few stocks from the industry that you may want to consider for your portfolio. But before that, it is worth taking a look at the industry’s shareholder returns and its current valuation first.
 

Industry Outperforms Sector & S&P 500

The Zacks Security and Safety Services industry has underperformed both the broader Industrial Products sector and the S&P 500 composite index in the past year.

Over this period, the industry has moved up 14% compared with the S&P 500 Index’s increase of 17.7% and the sector’s growth of 14.1%.

One-Year Price Performance

Industry's Current Valuation

On 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 16.89X compared with the S&P 500’s and the sector’s 23.36X and 21.57X, respectively.

Over the past five years, the industry has traded as high as 21.79X, as low as 14.08X and at the median of 17.23X, as the chart below shows:

Price-to-Earnings Ratio vs SP500

Price-to-Earnings Ratio vs Sector

4 Security and Safety Services Stocks to Keep a Tab on

Intellicheck: Based in Melville, NY, it is a leading technology company, developing and marketing wireless technology and identity systems for various applications, including mobile and handheld wireless devices for the government, military and commercial markets. IDN is benefiting from its market diversification strategy, strong customer base and growth in demand for its identity verification technology.

In the past 60 days, estimates for this Zacks Rank #1 (Strong Buy) company’s earnings have increased 20% for 2026. Shares of Intellicheck have skyrocketed 120.2% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Price and Consensus: IDN

Allegion: Headquartered in Dublin, Ireland, Allegion is a leading global provider of security products and solutions for business and domestic purposes. The company is well-positioned to benefit from strength in the Americas segment, driven by solid demand for non-residential products across education, hospitality and retail markets. Growing awareness about the need for the security and safety of people and infrastructure across the world bodes well for its International segment. The company is tapping this potential through strategic acquisitions, thus fueling its growth engine.

Although the Zacks Consensus Estimate for Allegion’s 2026 earnings has declined over the past 60 days, the same for 2025 (results awaited) has inched up 0.1%. Shares of this Zacks Rank #3 (Hold) company have gained 25.5% in the past year.

Price and Consensus: ALLE

Resideo Technologies: Based in Scottsdale, AZ, REZI is engaged in producing and offering home comfort, safety and security, and energy management products under brands including Resideo, Braukmann and First Alert. Resideo Technologies is poised to benefit from strong demand for First Alert SC5 connected smoke and carbon monoxide detectors. Also, positive market responses from its newly introduced products, including ElitePRO premium smart thermostats, and its continued focus on product development bode well.
 
The Zacks Consensus Estimate for Resideo Technologies’ 2026 earnings has remained steady in the past 60 days. Shares of this Zacks Rank #3 company have surged 48.4% in the past year.

Price and Consensus: REZI

Napco Security: Headquartered in Amityville, NY, the company provides electronic security systems to commercial, industrial, residential, institutional and government customers. Napco Security is benefiting from strong growth in equipment revenues, driven by solid demand for door-locking products. Also, the company’s focus on expanding recurring service revenues (RSR) is likely to be beneficial in the quarters ahead.

In the past 60 days, estimates for NSSC’s earnings have remained stable for fiscal 2026 (ending June 2026). Shares of this Zacks Rank #3 company have gained 6.5% in the past year.

Price and Consensus: NSSC

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

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