ALRM vs HON: Which Is the Better Buy in 2026?

Same yardstick, side by side (as of November 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.

The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. ALRM and HON share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.

This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined ALRM and HON exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.

Alarm.com Holdings, Inc. runs a cloud platform for connected property: intrusion detection, video surveillance, access control, thermostats, locks, lighting, and the mobile apps that tie them together. It does not sell to homeowners directly. Instead it licenses its software to a network of service providers, dealers, integrators and central monitoring stations, who install the equipment and bill the end customer, while Alarm.com collects a recurring per-property SaaS fee (roughly $5 to $6 a month for a residential account) and also resells hardware into the same channel. Beyond the residential core, the company has built out a commercial franchise (Alarm.com for Business, OpenEye video, CHeKT, Shooter Detection Systems) and an energy business, EnergyHub, that helps utilities orchestrate distributed resources like smart thermostats, batteries and EV chargers.

Full ALRM guide

Honeywell, which now operates as Honeywell Technologies (Nasdaq: HON), describes itself as a global, pure-play automation company serving the building, industrial and process sectors through services, solutions and products, run on its Accelerator operating system and its Forge intelligence layer. It has more than 50,000 employees and decades of operating data from a global installed base. Its Building Automation business sells controls, sensors, fire and security systems for commercial buildings. Industrial Automation covers process control, sensing, warehouse automation and the productivity (barcode scanning) business, and the process-technology franchise licenses refining and petrochemical technology and supplies the equipment and services around it, such as its planned role at the Dangote refinery project in Kenya. Honeywell makes money from a mix of equipment sales, long-cycle projects, recurring service and growing software offerings.

Full HON guide

Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.

• ALRM drivers: High-retention SaaS base; Commercial and enterprise expansion.
• HON drivers: Pure-play automation focus; Software and physical AI on the installed base.

A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: The U.S. For HON, as a standalone automation company, Honeywell is more exposed to construction activity, manufacturing capex and energy-sector spending than when aerospace aftermarket revenue cushioned results.

Growth-minded investors who believe the theme has years to run tend to accept the richer multiple for more upside; value-minded investors lean toward the cheaper forward earnings and steadier profile. Pick ALRM if you believe its drivers more; HON if you believe its. Many investors hold both, but since they share themes, that is a concentrated bet, not diversification. Decide deliberately and check overlap. For the full detail, see the ALRM and HON guides.

ALRM. Alarm.com trades at roughly 25x trailing earnings, about 19x forward and about 2.7x sales, a modest multiple for a software-led business that reflects high-single-digit revenue growth and a hardware drag on blended margins. Free cash flow over the trailing twelve months was about $100 million, and consensus calls for about $1.08 billion of 2026 revenue and $2.89 of EPS. The stock is up about 12% in 2026 and near its 52-week high of $58.62, with Q3 results due November 5.

HON. Honeywell's headline numbers are hard to read because the June 2026 aerospace spin-off and a large Q2 gain sit inside the trailing figures, which is why the trailing P/E shows near 8x. On forward estimates the stock trades around 22x 2027 EPS of about $9.82, a multiple in line with quality automation peers. The Q3 report on October 22 (consensus EPS about $2.16 on revenue of about $5.0 billion) will give the first clean standalone quarter.

Headline figures (approximate, October 2026): ALRM shows revenue (ttm) ~$1.06B (Q2 2026 +9.2% YoY to ~$277.7M), gross / operating margin (ttm) ~66% / ~15%, net income (ttm) ~$118M, EPS ~$2.26, q2 2026 eps (actual vs est.) ~$0.77 vs ~$0.65; HON shows revenue (ttm, includes aerospace until june) ~$38.1 billion, q2 2026 revenue (continuing operations) ~$5.2 billion, 2026 revenue (analyst consensus) ~$20.2 billion, operating margin ~20%.

ALRM and HON are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined ALRM and HON exposure against your real portfolio. It is not an investment adviser.