Brady Corporation (BRC) | Investment Case

1. Company Snapshot

1.a. Company Description

Brady Corporation manufactures and supplies identification solutions (IDS) and workplace safety (WPS) products to identify and protect premises, products, and people in the United States and internationally.The IDS segment offers safety signs, floor-marking tapes, pipe markers, labeling systems, spill control products, and lockout/tagout devices for facility identification and protection; materials, printing systems, RFID and bar code scanners for product identification, brand protection labeling, work in process labeling, and finished product identification; and hand-held printers, wire markers, sleeves, and tags for wire identification, as well as software and services for safety compliance auditing, procedure writing, and training.Its products also comprise name tags, badges, lanyards, rigid card printing systems, and access control software for people identification; wristbands and labels for tracking and enhancing the safety of patients; and custom wristbands.

This segment serves customers in various industries, such as industrial and electronic manufacturing, healthcare, chemical, oil, gas, automotive, aerospace, governments, mass transit, electrical contractors, education, leisure and entertainment, telecommunications, and others through distributors, direct sales, catalog marketing, and digital channels.The WPS segment provides workplace safety and compliance products, such as safety and compliance signs, tags, labels, and markings; informational signage and markings; asset tracking labels; first aid products; facility safety and personal protection equipment; and labor law and other compliance posters for various industries, including process, government, education, construction, and utilities, as well as manufacturers through catalog and digital channels.It also offers stock and custom identification products, as well as sells related resale products.

Brady Corporation was incorporated in 1914 and is headquartered in Milwaukee, Wisconsin.

Show Full description

1.b. Last Insights on BRC

Breaking News: Brady Corporation reported its fiscal 2026 second quarter results, with sales increasing 7.7 percent. Organic sales grew 1.6 percent, while acquisitions and foreign currency translation contributed 2.3 percent and 3.8 percent, respectively. The company raised the low end of its fiscal 2026 EPS guidance. Analysts at William Blair & Company and Stifel Nicolaus & Company have a hold and buy recommendation on the stock respectively, while others at Robert W. Baird & Co have a hold recommendation.

1.c. Company Highlights

Last Price	89.31
Change Percentage	-4.15%
Open	92.89
Previous Close	93.18
Market Cap ( Millions)	4213
Volume	448945
Year High	99.29
Year Low	62.7
M A 50	84.96
M A 200	76.59

FCF Yield	4.03%
Dividend Yield	1.09%
ROE	16.60%
Debt / Equity	11.04%
Net Debt / EBIDTA	-10.49%
Price To Book	3.22
Price Earnings Ratio	20.69
Price To FCF	24.82
Price To sales	2.68
EV / EBITDA	13.89

2. Brady Corporation's Q2 FY2026 Earnings: A Strong Performance

Brady Corporation reported a strong financial performance in its fiscal 2026 second quarter, with organic sales growth of 1.6% and a significant improvement in gross margin to 50.6% from 49.3% in the same period last year. The company's adjusted diluted earnings per share grew 9% to $1.09, beating the previous year's figure of $1.00. Net income increased 19.1% to $48.1 million from $40.3 million. The actual EPS came in at $1.01, missing estimates of $1.36.

Publication Date: Feb -20

                                    📋 Highlights
                                    20th Consecutive Quarter of Organic Sales Growth:
                                                Brady achieved 1.6% organic sales growth, with Americas/Asia up 3.1% and Europe/Australia down 1.1%.
Gross Margin Expansion:
                                                Gross margin rose to 50.6% (vs. 49.3% prior year), driven by cost restructuring and operational efficiency gains.
i4311 Product Launch:
                                                Debuted a portable industrial label printer capable of printing 5,000 labels per charge on hundreds of specialty materials.
Adjusted EPS Growth:
                                                Adjusted diluted EPS increased 9% to $1.09, with net income up 19.1% to $48.1 million year-over-year.
R&D Investment Strategy:
                                                Maintained ~6%+ sales R&D investment, targeting 3-year payback and long-term growth in engineered products over commoditized offerings.

                                

Regional Performance

The Americas and Asia region reported sales of $251.6 million, up 7.6% from Q2 last year, with organic sales growth of 3.1%. Asia continued to show strong performance with organic growth of 14.2%, while the Europe and Australia region reported a slight organic decline of 1.1%. Despite the weak macro activity in Europe, the region reported significant improvement in segment profit.

Guidance and Outlook

Brady Corporation expects organic sales growth in the low single-digit percentages for the year ending July 31, 2026. The company also guided on depreciation and amortization expense of approximately $44 million, capital expenditures of approximately $45 million, and a full-year income tax rate of approximately 21%. As per Russell Shaller, "We expect growth to be macro-dependent and will be stimulated when capacity utilization reaches around 80%."

Valuation

With a P/E Ratio of 21.59 and an EV/EBITDA of 14.5, Brady Corporation's valuation appears reasonable. The company's ROE of 16.6% and ROIC of 13.32% indicate a strong return on equity and invested capital. Analysts estimate next year's revenue growth at 3.9%, which is slightly higher than the current year's expected growth. The Dividend Yield stands at 1.04%, providing a relatively stable return to shareholders.

Investment in R&D

Brady Corporation continues to invest heavily in R&D, with a focus on engineered products and new technologies. The company has launched new products, such as the i4311 transportable industrial desktop label printer, which adds portability to customers' operations. As Russell Shaller emphasized, "R&D is a multi-year journey, and we expect the investments to pay back in 3 years."

3. NewsRoom

Brady Corporation (BRC) Q2 2026 Earnings Call Transcript

Feb -19

Source: seekingalpha.com

Brady Corporation Reports Fiscal 2026 Second Quarter Results and Raises the Low End of its Fiscal 2026 EPS Guidance

Feb -19

Source: globenewswire.com

Brady Corporation Announces Earnings Conference Call

Feb -10

Source: globenewswire.com

Thrivent Financial for Lutherans Decreases Stock Holdings in Brady Corporation $BRC

Feb -08

Source: defenseworld.net

Maryland State Retirement & Pension System Cuts Position in Brady Corporation $BRC

Jan -24

Source: defenseworld.net

Brady Corporation President Sold Shares Towards the End of 2025

Jan -15

Source: fool.com

Thomas Debruine Sells 5,538 Shares of Brady (NYSE:BRC) Stock

Jan -08

Source: defenseworld.net

Brady Stock Is up 13% This Past Year, but Here's Why One Fund Cashed Out Completely

Jan -07

Source: fool.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.43%)

6. Segments

Identification Solutions

Expected Growth: 3%

Brady Corporation's Identification Solutions segment growth is driven by increasing demand for safety and compliance in industries such as healthcare, manufacturing, and oil & gas. Growing adoption of automation and digitalization in these industries fuels the need for identification and tracking solutions, resulting in a 3% growth rate.

Workplace Safety

Expected Growth: 5%

Brady Corporation's 5% growth in Workplace Safety is driven by increasing regulatory requirements, rising worker compensation claims, and growing awareness of workplace hazards. Additionally, the need for companies to maintain a positive brand image and reduce operational disruptions are contributing to the demand for safety solutions, such as identification and tracking products, and lockout/tagout procedures.

7. Detailed Products

Identification Solutions

Brady's identification solutions provide a wide range of products and services to identify and track people, products, and assets.

Labels and Signs

Brady's labels and signs provide a wide range of identification and safety solutions for industrial, commercial, and institutional applications.

Workplace Safety

Brady's workplace safety solutions provide a range of products and services to help prevent accidents and ensure compliance with safety regulations.

Lockout/Tagout

Brady's lockout/tagout solutions provide a range of products and services to help prevent accidental machine startup and ensure compliance with safety regulations.

Spill Response

Brady's spill response solutions provide a range of products and services to help respond to and clean up spills and leaks.

Absorbents

Brady's absorbents provide a range of products to absorb and clean up spills and leaks.

Sorbent Pads

Brady's sorbent pads provide a range of products to absorb and clean up spills and leaks.

Spill Containment

Brady's spill containment solutions provide a range of products and services to help contain and prevent spills and leaks.

8. Brady Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Brady Corporation operates in a niche market with limited substitutes, but there are some alternatives available. The threat of substitutes is moderate.

Bargaining Power Of Customers

Brady Corporation has a diverse customer base, and no single customer has significant bargaining power. The company's products are also critical to its customers' operations, reducing their bargaining power.

Bargaining Power Of Suppliers

Brady Corporation has a moderate level of dependence on its suppliers, but it also has some bargaining power due to its large scale of operations. The company's suppliers are also diversified, reducing their bargaining power.

Threat Of New Entrants

The barriers to entry in Brady Corporation's industry are relatively high, and new entrants would need significant investments to compete with the company's established brand and distribution network.

Intensity Of Rivalry

The industrial and safety products industry is highly competitive, with several established players competing for market share. Brady Corporation faces intense competition from its rivals, which can lead to pricing pressure and reduced margins.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	7.53%
Debt Cost	5.66%
Equity Weight	92.47%
Equity Cost	7.71%
WACC	7.56%
Leverage	8.14%

11. Quality Control: Brady Corporation passed 9 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

ADT

A-Score: 6.8/10

Value: 8.0

Growth: 6.6

Quality: 6.4

Yield: 5.0

Momentum: 7.0

Volatility: 7.7

1-Year Total Return ->

Mueller Industries

A-Score: 6.4/10

Value: 4.3

Growth: 7.1

Quality: 7.9

Yield: 2.0

Momentum: 9.0

Volatility: 8.0

1-Year Total Return ->

Brady

A-Score: 6.1/10

Value: 3.9

Growth: 6.2

Quality: 7.6

Yield: 3.0

Momentum: 7.0

Volatility: 9.0

1-Year Total Return ->

MSA Safety

A-Score: 5.7/10

Value: 3.5

Growth: 6.7

Quality: 8.0

Yield: 2.0

Momentum: 5.0

Volatility: 9.0

1-Year Total Return ->

Brinks

A-Score: 5.5/10

Value: 4.7

Growth: 6.6

Quality: 4.3

Yield: 2.0

Momentum: 8.0

Volatility: 7.7

1-Year Total Return ->

Resideo Technologies

A-Score: 4.8/10

Value: 8.5

Growth: 5.4

Quality: 4.3

Yield: 0.0

Momentum: 7.0

Volatility: 3.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

6.44%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.56%

Brady Corporation - US1046741062

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on BRC

1.c. Company Highlights

Better Quality

Less Volatile

Stable Momentum

Earnings Beats

Revenues Miss

Revenues Beats

Strong Momentum

Fairly Valued

Earnings Miss

Average Yield

Average Growth

2. Brady Corporation's Q2 FY2026 Earnings: A Strong Performance

Regional Performance

Guidance and Outlook

Valuation

Investment in R&D

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.43%)

6. Segments

Identification Solutions

Expected Growth: 3%

Workplace Safety

Expected Growth: 5%

7. Detailed Products

Identification Solutions

Labels and Signs

Workplace Safety

Lockout/Tagout

Spill Response

Absorbents

Sorbent Pads

Spill Containment

8. Brady Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Brady Corporation passed 9 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

89.31$

Current Price

89.31$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA