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

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 competitors, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

82.3% of shares of all “Heavy Machinery & Vehicles” companies are held by institutional investors. 7.9% of Allison Transmission shares are held by insiders. Comparatively, 8.3% of shares of all “Heavy Machinery & Vehicles” companies are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Risk and Volatility

Allison Transmission has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500. Comparatively, Allison Transmission’s competitors have a beta of 1.45, suggesting that their average share price is 45% more volatile than the S&P 500.

Profitability

This table compares Allison Transmission and its competitors’ 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%

Earnings and Valuation

This table compares Allison Transmission and its competitors revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Allison Transmission $1.84 billion $214.90 million 17.79
Allison Transmission Competitors $6.06 billion $48.37 million 175.69

Allison Transmission’s competitors have higher revenue, but lower earnings than Allison Transmission. Allison Transmission 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.

Analyst Recommendations

This is a summary of recent recommendations for Allison Transmission and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Allison Transmission 2 7 5 0 2.21
Allison Transmission Competitors 171 878 961 17 2.41

Allison Transmission presently has a consensus price target of $43.70, suggesting a potential upside of 8.68%. As a group, “Heavy Machinery & Vehicles” companies have a potential upside of 6.39%. Given Allison Transmission’s higher possible upside, equities analysts clearly believe Allison Transmission is more favorable than its competitors.

Summary

Allison Transmission competitors beat Allison Transmission on 8 of the 15 factors compared.

About Allison Transmission

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.

Receive News & Ratings for Allison Transmission Holdings Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Allison Transmission Holdings Inc. and related companies with MarketBeat.com's FREE daily email newsletter.