Allison Transmission (NYSE:ALSN – Get Free Report) and Custom Truck One Source (NYSE:CTOS – Get Free Report) are both mid-cap auto/tires/trucks companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.
Profitability
This table compares Allison Transmission and Custom Truck One Source’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Allison Transmission | 14.88% | 37.50% | 10.74% |
| Custom Truck One Source | -0.88% | -2.18% | -0.49% |
Analyst Recommendations
This is a summary of recent recommendations for Allison Transmission and Custom Truck One Source, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Allison Transmission | 1 | 5 | 2 | 1 | 2.33 |
| Custom Truck One Source | 2 | 1 | 4 | 0 | 2.29 |
Institutional and Insider Ownership
96.9% of Allison Transmission shares are held by institutional investors. Comparatively, 90.1% of Custom Truck One Source shares are held by institutional investors. 1.1% of Allison Transmission shares are held by insiders. Comparatively, 4.7% of Custom Truck One Source shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Volatility & Risk
Allison Transmission has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500. Comparatively, Custom Truck One Source has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500.
Valuation & Earnings
This table compares Allison Transmission and Custom Truck One Source”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Allison Transmission | $3.01 billion | 3.19 | $623.00 million | $6.43 | 17.99 |
| Custom Truck One Source | $1.94 billion | 1.13 | -$31.05 million | ($0.09) | -107.61 |
Allison Transmission has higher revenue and earnings than Custom Truck One Source. Custom Truck One Source is trading at a lower price-to-earnings ratio than Allison Transmission, indicating that it is currently the more affordable of the two stocks.
Summary
Allison Transmission beats Custom Truck One Source on 11 of the 15 factors compared between the two stocks.
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.
About Custom Truck One Source
Custom Truck One Source, Inc. provides specialty equipment rental and sale services to the electric utility transmission and distribution, telecommunications, rail, forestry, waste management, and other infrastructure-related industries in the United States and Canada. The company operates through three segments: Equipment Rental Solutions (ERS), Truck and Equipment Sales (TES), and Aftermarket Parts and Services (APS). The ERS segment owns new and used specialty equipment, including truck-mounted aerial lifts, cranes, service trucks, dump trucks, trailers, digger derricks, and other machinery and equipment. The TES segment offers new equipment for sale to be used for end-markets, which can be modified to meet customers specific needs. The APS segment provides truck and equipment maintenance and repair services; and rents and sells specialized tools, including stringing blocks, insulated hot stick, and rigging equipment, as well as sale of specialized aftermarket parts. The company was formerly known as Nesco Holdings, Inc. and changed its name to Custom Truck One Source, Inc. in April 2021. Custom Truck One Source, Inc. was founded in 1988 and is headquartered in Kansas City, Missouri.
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