Analyzing Allison Transmission (ALSN) and Its Competitors

Allison Transmission (NYSE:ALSN) is one of 436 publicly-traded companies in the “Machinery” industry, but how does it compare to its rivals? We will compare Allison Transmission to similar businesses based on the strength of its risk, valuation, institutional ownership, earnings, profitability, dividends and analyst recommendations.

Institutional & Insider Ownership

96.9% of Allison Transmission shares are held by institutional investors. Comparatively, 51.7% of shares of all “Machinery” companies are held by institutional investors. 1.1% of Allison Transmission shares are held by company insiders. Comparatively, 14.3% of shares of all “Machinery” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments 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	11.12%	43.23%	10.57%
Allison Transmission Competitors	-1,044.47%	-15.02%	0.57%

Dividends

Allison Transmission pays an annual dividend of $1.16 per share and has a dividend yield of 1.0%. Allison Transmission pays out 18.4% of its earnings in the form of a dividend. As a group, “Machinery” companies pay a dividend yield of 2.8% and pay out 24.6% of their earnings in the form of a dividend. Allison Transmission has raised its dividend for 2 consecutive years.

Earnings and Valuation

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	$3.01 billion	$623.00 million	19.24
Allison Transmission Competitors	$4.63 billion	$364.05 million	3.93

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

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Allison Transmission	0	3	4	2	2.89
Allison Transmission Competitors	4195	14693	18192	804	2.41

Allison Transmission presently has a consensus target price of $133.57, indicating a potential upside of 10.35%. As a group, “Machinery” companies have a potential upside of 31.90%. Given Allison Transmission’s rivals higher probable upside, analysts clearly believe Allison Transmission has less favorable growth aspects than its rivals.

Volatility and Risk

Allison Transmission has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500. Comparatively, Allison Transmission’s rivals have a beta of 4.58, suggesting that their average stock price is 358% more volatile than the S&P 500.

Summary

Allison Transmission beats its rivals on 9 of the 15 factors compared.

Allison Transmission Company Profile

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.