FLIR Systems (NASDAQ: FLIR) and Allegion PLC (NYSE:ALLE) are both mid-cap aerospace companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, earnings, institutional ownership, risk and profitabiliy.

Insider and Institutional Ownership

92.2% of FLIR Systems shares are held by institutional investors. Comparatively, 90.9% of Allegion PLC shares are held by institutional investors. 3.0% of FLIR Systems shares are held by company insiders. Comparatively, 0.6% of Allegion PLC shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings for FLIR Systems and Allegion PLC, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FLIR Systems 0 4 3 0 2.43
Allegion PLC 0 1 4 0 2.80

FLIR Systems currently has a consensus price target of $36.43, suggesting a potential upside of 3.99%. Allegion PLC has a consensus price target of $84.75, suggesting a potential upside of 4.05%. Given Allegion PLC’s stronger consensus rating and higher possible upside, analysts clearly believe Allegion PLC is more favorable than FLIR Systems.

Volatility and Risk

FLIR Systems has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500. Comparatively, Allegion PLC has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500.

Dividends

FLIR Systems pays an annual dividend of $0.60 per share and has a dividend yield of 1.7%. Allegion PLC pays an annual dividend of $0.64 per share and has a dividend yield of 0.8%. FLIR Systems pays out 39.5% of its earnings in the form of a dividend. Allegion PLC pays out 25.8% 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.

Earnings and Valuation

This table compares FLIR Systems and Allegion PLC’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
FLIR Systems $1.69 billion 2.83 $359.46 million $1.52 23.05
Allegion PLC $2.28 billion 3.40 $494.50 million $2.48 32.84

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

Profitability

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

Net Margins Return on Equity Return on Assets
FLIR Systems 12.32% 13.58% 8.56%
Allegion PLC 10.50% 234.79% 14.72%

Summary

Allegion PLC beats FLIR Systems on 12 of the 16 factors compared between the two stocks.

About FLIR Systems

FLIR Systems, Inc. (FLIR) designs, develops, markets and distributes thermal imaging systems, visible-light imaging systems, locater systems, measurement and diagnostic systems and threat-detection solutions. The Company’s segments include Surveillance, Instruments, Security, OEM & Emerging Markets, Maritime and Detection. Its Surveillance segment provides enhanced imaging and recognition solutions. Its Instruments segment provides devices that image, measure and assess thermal energy, gases and other environmental elements for industrial, commercial, and scientific applications under the FLIR and Extech brands. Its OEM & Emerging Markets segment provides thermal imaging camera cores and components. Its Maritime segment develops and manufactures electronics and imaging instruments. Its Security segment develops and manufactures a range of cameras and video recording systems. The Detection segment offers sensors, instruments and integrated platform solutions.

About Allegion PLC

Allegion Public Limited Company is a provider of security products and solutions. The Company offers a portfolio of mechanical and electronic security products across a range of brands. Its segments include Americas; Europe, Middle East, India and Africa (EMEIA), and Asia Pacific. Its products include door closers and controls; door and door frames (steel); electronic security products; electronic and biometric access control systems; exit devices; locks, locksets, portable locks and key systems; time, attendance and workforce productivity systems, and other accessories. It sells a range of security products and solutions for end users in commercial, institutional and residential facilities across the world, including into the education, healthcare, government, hospitality, commercial office and single and multi-family residential markets. As of December 31, 2016, it manufactured and sold mechanical and electronic security products and solutions in approximately 130 countries.

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