Critical Review: Allison Transmission Holdings (ALSN) vs. Its Peers
Allison Transmission Holdings (NYSE: ALSN) is one of 15 public companies in the “Heavy Machinery & Vehicles” industry, but how does it compare to its competitors? We will compare Allison Transmission Holdings to similar companies based on the strength of its analyst recommendations, institutional ownership, valuation, earnings, risk, profitability and dividends.
This table compares Allison Transmission Holdings and its competitors’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Allison Transmission Holdings||16.34%||45.65%||8.34%|
|Allison Transmission Holdings Competitors||3.71%||14.28%||4.26%|
Valuation & Earnings
This table compares Allison Transmission Holdings and its competitors top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||NetIncome||Price/Earnings Ratio|
|Allison Transmission Holdings||$1.84 billion||$214.90 million||19.33|
|Allison Transmission Holdings Competitors||$4.89 billion||$73.89 million||166.30|
Allison Transmission Holdings’ competitors have higher revenue, but lower earnings than Allison Transmission Holdings. Allison Transmission Holdings is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.
Institutional and Insider Ownership
82.4% of shares of all “Heavy Machinery & Vehicles” companies are held by institutional investors. 7.9% of Allison Transmission Holdings shares are held by company insiders. Comparatively, 8.3% of shares of all “Heavy Machinery & Vehicles” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
This is a breakdown of recent ratings and recommmendations for Allison Transmission Holdings and its competitors, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Allison Transmission Holdings||2||7||4||0||2.15|
|Allison Transmission Holdings Competitors||167||871||942||17||2.41|
Allison Transmission Holdings presently has a consensus price target of $42.78, suggesting a potential downside of 2.07%. As a group, “Heavy Machinery & Vehicles” companies have a potential upside of 3.51%. Given Allison Transmission Holdings’ competitors stronger consensus rating and higher probable upside, analysts clearly believe Allison Transmission Holdings has less favorable growth aspects than its competitors.
Allison Transmission Holdings pays an annual dividend of $0.60 per share and has a dividend yield of 1.4%. Allison Transmission Holdings 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 1.2% and pay out 33.1% of their earnings in the form of a dividend. Allison Transmission Holdings has raised its dividend for 4 consecutive years. Allison Transmission Holdings is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.
Risk & Volatility
Allison Transmission Holdings has a beta of 1.24, indicating that its stock price is 24% more volatile than the S&P 500. Comparatively, Allison Transmission Holdings’ competitors have a beta of 1.43, indicating that their average stock price is 43% more volatile than the S&P 500.
Allison Transmission Holdings competitors beat Allison Transmission Holdings on 9 of the 15 factors compared.
About Allison Transmission Holdings
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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