4 Stocks to Gain From the Thriving Security and Safety Industry

Core Insights - The Zacks Security and Safety Services industry is poised for growth due to increasing demand for security products and solutions, driven by heightened awareness of safety for people and infrastructure [1][4] - Enhanced research and development efforts, supported by government initiatives, are expected to positively impact the industry's near-term prospects [2][5] Industry Overview - The industry includes firms providing advanced security solutions for residential, commercial, and institutional purposes, with applications in personal defense, vehicle recovery, and hazard detection [3] - Key end markets served by the industry include manufacturing, electronics, hospitality, education, construction, telecommunications, aerospace, and medical [3] Industry Trends - Rising instances of terrorism and criminal activities are driving demand for security services, with governments and businesses deploying IP-based cameras for enhanced surveillance [4] - The increasing need for cybersecurity products, such as firewalls and intrusion detection systems, is also contributing to industry growth [4] Financial Performance - The Zacks Security and Safety Services industry has outperformed both the broader sector and the S&P 500 index, with a 64.3% increase over the past year compared to 32.8% for the sector and 32.4% for the S&P 500 [12] - The industry's earnings estimates for 2024 have increased by 0.7% over the past year, indicating a positive earnings outlook [9] Valuation Metrics - The industry is currently trading at a forward P/E ratio of 33.38X, higher than the S&P 500's 22.58X and the sector's 22.27X [14] - Over the past five years, the industry's P/E ratio has ranged from a low of 14.16X to a high of 33.38X, with a median of 22.45X [14] Key Companies - Alarm.com: Engaged in IoT solutions, the company has seen a 7.3% increase in earnings estimates for 2024 and a 12.6% rise in shares over the past year [15][16] - Allegion: A provider of mechanical and electronic security products, Allegion's earnings estimates have increased by 2.4% for 2024, with shares rising 31.2% in the past year [18][19] - MSA Safety: Focused on safety products, MSA has consistently surpassed earnings estimates, with a 5.8% average surprise and a 3.5% gain in shares year-to-date [21][22] - ADT: Offering smart home solutions, ADT's earnings estimates have increased by 12.2% for 2024, with shares gaining 22.7% in the past year [25][26]