ADT vs Alarm.com Which Outperforms?

ADT and Alarm.com are two major players in the home security industry, both offering a range of services and products to help protect homes and businesses. ADT is a well-established company with a long history in the industry, while Alarm.com is a newer player that has quickly gained traction with its innovative technology and cloud-based solutions. Investors may be considering both stocks as potential investment opportunities, weighing factors such as market share, revenue growth, and technological advancements. This comparison will examine the strengths and weaknesses of ADT and Alarm.com stocks to help investors make informed decisions.

ADT or Alarm.com?

When comparing ADT and Alarm.com, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between ADT and Alarm.com.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. ADT has a dividend yield of 3.3%, while Alarm.com has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. ADT reports a 5-year dividend growth of 0.00% year and a payout ratio of 18.54%. On the other hand, Alarm.com reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with ADT P/E ratio at 7.88 and Alarm.com's P/E ratio at 24.18. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. ADT P/B ratio is 1.79 while Alarm.com's P/B ratio is 4.38.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, ADT has seen a 5-year revenue growth of -0.11%, while Alarm.com's is 0.83%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with ADT's ROE at 23.30% and Alarm.com's ROE at 18.18%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $7.70 for ADT and $60.99 for Alarm.com. Over the past year, ADT's prices ranged from $5.63 to $8.25, with a yearly change of 46.54%. Alarm.com's prices fluctuated between $51.87 and $77.29, with a yearly change of 49.02%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.