Icahn Enterprises (NASDAQ:IEP) and Allison Transmission (NYSE:ALSN) are both multi-sector conglomerates companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, profitability, risk, institutional ownership, analyst recommendations and dividends.

Institutional & Insider Ownership

96.8% of Icahn Enterprises shares are held by institutional investors. 90.1% of Icahn Enterprises shares are held by insiders. Comparatively, 8.4% of Allison Transmission shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Icahn Enterprises 5.29% 4.76% 1.85%
Allison Transmission 26.64% 90.71% 14.37%

Earnings and Valuation

This table compares Icahn Enterprises and Allison Transmission’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Icahn Enterprises $21.74 billion 0.56 $2.43 billion N/A N/A
Allison Transmission $2.26 billion 2.64 $504.00 million $2.66 17.31

Icahn Enterprises has higher revenue and earnings than Allison Transmission.

Analyst Ratings

This is a summary of current ratings for Icahn Enterprises and Allison Transmission, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Icahn Enterprises 1 0 0 0 1.00
Allison Transmission 3 3 6 0 2.25

Icahn Enterprises currently has a consensus price target of $45.00, indicating a potential downside of 30.77%. Allison Transmission has a consensus price target of $47.90, indicating a potential upside of 4.02%. Given Allison Transmission’s stronger consensus rating and higher probable upside, analysts plainly believe Allison Transmission is more favorable than Icahn Enterprises.

Risk & Volatility

Icahn Enterprises has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500. Comparatively, Allison Transmission has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500.

Dividends

Icahn Enterprises pays an annual dividend of $7.00 per share and has a dividend yield of 10.8%. Allison Transmission pays an annual dividend of $0.60 per share and has a dividend yield of 1.3%. Allison Transmission pays out 22.6% of its earnings in the form of a dividend.

About Icahn Enterprises

Icahn Enterprises L.P., through its subsidiaries, operates in investment, automotive, energy, railcar, gaming, metals, mining, food packaging, real estate, and home fashion businesses in the United States, Germany, and Internationally. Its Investment segment operates various private investment funds. The company's Automotive segment manufactures and distributes components, accessories, and systems to the automotive, heavy-duty, marine, railroad, agricultural, off-road, aerospace, power generation, and industrial markets; and distributes automotive parts. Its Energy segment refines and markets transportation fuels; and manufactures nitrogen fertilizers. Its Railcar segment manufactures and sells railcars; and provides railcar repair services, as well as leases railcars. The company's Gaming segment owns and operates casino gaming properties, including 8 casino facilities with 5,800 hotel rooms. The company's Metals segment collects, processes, and sells ferrous and non-ferrous metals, as well as processes and distributes steel pipe and plate products. Its Mining segment produces and sells iron ore products to the steel industry. The company's Food Packaging segment produces and sells cellulosic, fibrous, and plastic casings for the processed meat and poultry industry. Its Real Estate segment is involved in the rental of commercial real estate properties; construction and sale of single-family and multi-family homes, lots in subdivisions and planned communities, and raw land for residential development; and operation of golf and club. The company's Home Fashion segment manufactures and distributes home fashion consumer products. Icahn Enterprises L.P. was founded in 1987 and is headquartered in New York, New York.

About Allison Transmission

Allison Transmission Holdings, Inc., together with its subsidiaries, designs, manufactures, and sells commercial and defense fully-automatic transmissions for medium- and heavy-duty commercial vehicles, and medium- and heavy-tactical U.S. defense vehicles worldwide. It offers 13 transmission product lines with approximately 100 product models for various applications, including distribution, refuse, construction, fire, and emergency on-highway trucks; school, transit, and hybrid-transit buses; motor homes; energy, mining, and construction off-highway vehicles and equipment; and wheeled and tracked defense vehicles. The company markets its transmissions under Allison Transmission brand name; and remanufactured transmissions under ReTran brand name. It also sells branded replacement parts, support equipment, and other products necessary to service the installed base of vehicles utilizing its transmissions, as well as defense kits, engineering services, and extended transmission coverage services to various original equipment manufacturers, distributors, and the U.S. government. The company serves customers through an independent network of approximately 1,400 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.

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