Allegion vs Advanced Drainage Systems
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KIRA’s take AI analyst
I put Allegion and Advanced Drainage Systems side by side, using each one’s latest annual report. Here is what stands out:
- Allegion is the larger business, with $4.1B of revenue in fiscal 2025 against $3.1B for Advanced Drainage Systems.
- Allegion grew revenue faster (7.8%, against 5.0%).
- Allegion kept more of each dollar of sales as operating profit (21.1% operating margin, against 20.3%).
- Advanced Drainage Systems turned more of its sales into free cash flow (18.7% FCF margin, against 16.9%).
- Allegion earned a higher return on the capital invested in it (21.5%, against 15.8%).
- Investors pay more for each dollar of Advanced Drainage Systems’s earnings: a P/E of 22.7x against 22.2x for Allegion.
Who comes out ahead
Of the 11 measures where higher (or lower) is clearly better, how many each company leads.
Allegion
ALLE
9/11
Revenue growthGross marginOperating marginNet marginReturn on capitalReturn on equityPiotroski F-scoreNet debt / EBITDAShare count change
Advanced Drainage Systems
WMS
2/11
5-year growthFCF margin
Side by side
Best in the row
| Latest fiscal year | ALLE FY25 | WMS FY26 |
|---|---|---|
| Size | ||
| Market cap | $15.2B | $10.1B |
| Revenue | $4.1B | $3.1B |
| Free cash flow | $686M | $569M |
| Net income | $644M | $427M |
| Growth | ||
| Revenue growth | 7.8% | 5.0% |
| 5-year growth | 8.4% | 9.0% |
| Share count change | −1.1% | 0.3% |
| Profitability | ||
| Gross margin | 45.2% | 38.3% |
| Operating margin | 21.1% | 20.3% |
| Net margin | 15.8% | 14.0% |
| FCF margin | 16.9% | 18.7% |
| Return on capital | 21.5% | 15.8% |
| Return on equity | 36.1% | 25.2% |
| Balance sheet | ||
| Net debt | $1.6B | $1.6B |
| Net debt / EBITDA | 1.6x | 1.9x |
| Dividends and buybacks | $255M | $148M |
| Valuation & quality | ||
| P/E | 22.2x | 22.7x |
| Piotroski F-score | 8 | 4 |
Ten years
Revenue
Operating margin
Free cash flow
Return on capital
Each company's latest fiscal year; fiscal years end in different months. The best value in each row is highlighted where higher (or lower) is clearly better. Not investment advice.