Aebi Schmidt (NASDAQ:AEBI) & Allison Transmission (NYSE:ALSN) Critical Survey

Aebi Schmidt (NASDAQ:AEBI) and Allison Transmission (NYSE:ALSN) are both industrials companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, valuation, profitability, earnings, dividends, analyst recommendations and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations for Aebi Schmidt and Allison Transmission, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aebi Schmidt	0	1	2	0	2.67
Allison Transmission	0	3	4	2	2.89

Aebi Schmidt presently has a consensus target price of $17.00, indicating a potential upside of 53.99%. Allison Transmission has a consensus target price of $131.57, indicating a potential upside of 17.88%. Given Aebi Schmidt’s higher probable upside, analysts clearly believe Aebi Schmidt is more favorable than Allison Transmission.

Dividends

Aebi Schmidt pays an annual dividend of $0.10 per share and has a dividend yield of 0.9%. Allison Transmission pays an annual dividend of $1.16 per share and has a dividend yield of 1.0%. Aebi Schmidt pays out 31.2% of its earnings in the form of a dividend. Allison Transmission pays out 18.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Allison Transmission has raised its dividend for 2 consecutive years. Allison Transmission is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Aebi Schmidt has a beta of 2.59, indicating that its stock price is 159% more volatile than the S&P 500. Comparatively, Allison Transmission has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500.

Valuation and Earnings

This table compares Aebi Schmidt and Allison Transmission”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aebi Schmidt	$1.53 billion	0.56	$9.74 million	$0.32	34.50
Allison Transmission	$3.01 billion	3.06	$623.00 million	$6.29	17.74

Allison Transmission has higher revenue and earnings than Aebi Schmidt. Allison Transmission is trading at a lower price-to-earnings ratio than Aebi Schmidt, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Aebi Schmidt and Allison Transmission’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aebi Schmidt	1.09%	2.59%	1.04%
Allison Transmission	12.02%	38.18%	9.99%

Insider & Institutional Ownership

96.9% of Allison Transmission shares are held by institutional investors. 39.1% of Aebi Schmidt shares are held by insiders. Comparatively, 1.1% of Allison Transmission shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Allison Transmission beats Aebi Schmidt on 14 of the 18 factors compared between the two stocks.

About Aebi Schmidt

Aebi Schmidt Holding AG is a provider of mission-critical infrastructure, environmental and agricultural solutions. Aebi Schmidt Holding AG, formerly known as The Shyft Group Inc., is based in NOVI, Mich.

About Allison Transmission

Allison Transmission Holdings, Inc., together with its subsidiaries, designs, manufactures, and sells fully automatic transmissions for medium- and heavy-duty commercial vehicles and medium- and heavy-tactical U.S. defense vehicles, and electrified propulsion systems worldwide. It provides commercial-duty on-highway, off-highway and defense fully automatic transmissions, and electric hybrid and fully electric systems. The company offers transmissions for various applications, including distribution, refuse, construction, fire, and emergency on-highway trucks; school and transit buses; motor homes; energy, mining, and construction off-highway vehicles and equipment; and wheeled and tracked defense vehicles. It provides its transmissions and electric propulsion solutions under the Allison Transmission brand name; and remanufactured transmissions under the ReTran brand name. The company also sells branded replacement parts, support equipment, aluminum die cast components, and other products necessary to service the installed base of vehicles utilizing its solutions, as well as defense kits, engineering services, and extended transmission coverage services to various original equipment manufacturers, distributors, and the U.S. government. It serves customers through an independent network of approximately 1,600 independent distributor and dealer locations. The company was formerly known as Clutch Holdings, Inc. Allison Transmission Holdings, Inc. was founded in 1915 and is headquartered in Indianapolis, Indiana.