Here's Why You Should Hold Allegion (ALLE) in Your Portfolio

Core Insights - Allegion plc (ALLE) is experiencing growth in its Americas segment, with a revenue increase of 3.7% in Q4 2023, driven by strong non-residential business momentum [1] - The international segment also showed positive performance, with a revenue growth of 5.9% in Q4 2023, supported by demand in electronics and software solutions [1] - For 2024, Allegion anticipates total revenue growth of 1.5-3.5% and organic sales growth of 1-3% compared to the previous year [1] - The company is focused on expanding its business through acquisitions, including the purchase of Montajes electronics Dorcas S.L. in March 2024 and Boss Door Controls in February 2024, which are expected to enhance its product offerings [2] - Allegion's acquisitions in 2023 contributed to a 7.9% increase in sales [2] - The company is committed to shareholder value, having paid $158.7 million in dividends in 2023, a 10.3% increase year-over-year, and repurchased 0.5 million shares for $59.9 million [2] - Allegion announced a 7% increase in its quarterly dividend rate in February 2024 [2] - Over the past three months, Allegion's stock has gained 17.8%, outperforming the industry growth of 13.1% [2] Challenges - There is a noted softness in the Americas segment due to decreased demand for residential products, which is expected to continue given current market conditions [3] - The mechanical portfolio is also facing lower volumes, which may negatively impact Allegion's near-term performance [3] - The cost of goods sold has risen by 6.1% year-over-year in 2023, primarily due to increased raw material costs, despite cost-cutting measures [3] - Selling, general, and administrative expenses increased by 17.6% in 2023, adding to the financial pressures [3]