Brady Corporation (BRC): A Bull Case Theory

We came across a bullish thesis on Brady Corporation on Value Investing subreddit by Max061980. In this article, we will summarize the bulls’ thesis on BRC. Brady Corporation’s share was trading at $71.14 as of August 5^th. BRC’s trailing P/E was 17.57 according to Yahoo Finance.

Brady Corporation (NYSE: BRC) operates in the essential identification and safety products segment, offering solutions such as industrial labels, signage, printers, and software that support compliance and workplace safety across industries like manufacturing, healthcare, and utilities. This niche positioning provides a durable competitive moat, underpinned by recurring revenue and strong recession resilience, while its largely tariff-resistant nature adds defensive layer. The company’s valuation appears compelling, trading at approximately 17.3x trailing earnings and 14.6x forward P/E—both notably below its 10-year average of over 25x.

Its EV/EBITDA multiple of 11.2x is slightly under historical levels, and a PEG ratio of 1.3 suggests fair, if not discounted, growth pricing. Financially, Brady demonstrates robust fundamentals: return on equity near 18%, ROIC comfortably exceeding WACC, and a conservative payout ratio of 26%, leaving room for consistent dividend growth. While revenue expansion has leaned heavily on acquisitions, organic growth remains subdued, which could explain part of the valuation discount.

Nevertheless, the company maintains stable margins, generates solid capital returns, and operates with a conservative balance sheet, signaling operational discipline and resilience. Given its strong cash generation and underleveraged profile, the current valuation may reflect market underappreciation rather than structural weakness. With a combination of defensive characteristics, room for further capital returns, and the potential for multiple re-rating if organic growth improves, Brady offers a compelling case for investors seeking stable, quality businesses at reasonable valuations. The question remains whether muted organic growth justifies the discount or creates an opportunity for long-term upside.

Previously, we covered a bullish thesis on Napco Security Technologies, Inc. (NSSC) by Value Chaser in April 2025, which highlighted its transition to high-margin recurring revenue, strong balance sheet, and attractive valuation. The stock has appreciated about 40% since then as the recurring revenue model strengthened. The thesis still stands, given continued margin expansion. Max061980 shares a similar view but emphasizes Brady’s defensive niche, valuation discount, and strong capital returns.

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Disclosure: None.