Allison Transmission (NYSE: ALSN) is one of 15 public companies in the “Heavy Machinery & Vehicles” industry, but how does it weigh in compared to its rivals? We will compare Allison Transmission to similar companies based on the strength of its profitability, valuation, risk, earnings, dividends, institutional ownership and analyst recommendations.

Risk and Volatility

Allison Transmission has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500. Comparatively, Allison Transmission’s rivals have a beta of 1.43, meaning that their average share price is 43% more volatile than the S&P 500.

Insider & Institutional Ownership

82.2% of shares of all “Heavy Machinery & Vehicles” companies are held by institutional investors. 7.9% of Allison Transmission shares are held by company insiders. Comparatively, 8.9% of shares of all “Heavy Machinery & Vehicles” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Allison Transmission and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Allison Transmission 16.34% 45.65% 8.34%
Allison Transmission Competitors 4.06% 13.41% 3.96%

Dividends

Allison Transmission pays an annual dividend of $0.60 per share and has a dividend yield of 1.5%. Allison Transmission pays out 26.5% of its earnings in the form of a dividend. As a group, “Heavy Machinery & Vehicles” companies pay a dividend yield of 1.3% and pay out 33.7% of their earnings in the form of a dividend. Allison Transmission has raised its dividend for 4 consecutive years. Allison Transmission is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of recent recommendations for Allison Transmission and its rivals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Allison Transmission 2 7 5 0 2.21
Allison Transmission Competitors 171 885 965 17 2.41

Allison Transmission presently has a consensus target price of $43.70, suggesting a potential upside of 6.27%. As a group, “Heavy Machinery & Vehicles” companies have a potential upside of 7.99%. Given Allison Transmission’s rivals stronger consensus rating and higher possible upside, analysts clearly believe Allison Transmission has less favorable growth aspects than its rivals.

Valuation and Earnings

This table compares Allison Transmission and its rivals top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Allison Transmission $1.84 billion $214.90 million 18.19
Allison Transmission Competitors $6.06 billion $48.37 million 117.29

Allison Transmission’s rivals have higher revenue, but lower earnings than Allison Transmission. Allison Transmission is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Summary

Allison Transmission rivals beat Allison Transmission on 9 of the 15 factors compared.

Allison Transmission Company Profile

Allison Transmission Holdings, Inc. and its subsidiaries design and manufacture commercial and defense fully-automatic transmissions. The Company manufactures fully-automatic transmissions for medium- and heavy-duty commercial vehicles, and medium-and heavy-tactical United States defense vehicles. The Company’s transmissions are used in a range of applications, including on-highway trucks (distribution, refuse, construction, fire and emergency), buses (primarily school, transit and hybrid-transit), motorhomes, off-highway vehicles and equipment (energy, mining and construction) and defense vehicles (wheeled and tracked). The Company’s transmissions are sold under the Allison Transmission brand name and remanufactured transmissions are sold under the ReTran brand name. The Company has developed over 100 different models that were used in more than 2,500 different vehicle configurations and were compatible with over 500 combinations of engines, as of December 31, 2016.

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