Allison Transmission Holdings (NYSE: ALSN) and Douglas Dynamics (NYSE:PLOW) are both auto/tires/trucks companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, analyst recommendations, risk, dividends and valuation.
Allison Transmission Holdings pays an annual dividend of $0.60 per share and has a dividend yield of 1.6%. Douglas Dynamics pays an annual dividend of $0.96 per share and has a dividend yield of 2.8%. Allison Transmission Holdings pays out 33.7% of its earnings in the form of a dividend. Douglas Dynamics pays out 76.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Allison Transmission Holdings has raised its dividend for 4 consecutive years and Douglas Dynamics has raised its dividend for 4 consecutive years.
Valuation & Earnings
This table compares Allison Transmission Holdings and Douglas Dynamics’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Allison Transmission Holdings||$1.98 billion||2.75||$707.40 million||$1.78||20.55|
|Douglas Dynamics||$465.33 million||1.64||$86.94 million||$1.26||26.83|
Allison Transmission Holdings has higher revenue and earnings than Douglas Dynamics. Allison Transmission Holdings is trading at a lower price-to-earnings ratio than Douglas Dynamics, indicating that it is currently the more affordable of the two stocks.
This table compares Allison Transmission Holdings and Douglas Dynamics’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Allison Transmission Holdings||14.32%||31.27%||6.77%|
Risk & Volatility
Allison Transmission Holdings has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500. Comparatively, Douglas Dynamics has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500.
Institutional & Insider Ownership
85.4% of Douglas Dynamics shares are owned by institutional investors. 7.9% of Allison Transmission Holdings shares are owned by company insiders. Comparatively, 3.2% of Douglas Dynamics shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
This is a summary of current ratings and target prices for Allison Transmission Holdings and Douglas Dynamics, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Allison Transmission Holdings||1||5||5||1||2.50|
Allison Transmission Holdings presently has a consensus target price of $41.43, suggesting a potential upside of 13.29%. Douglas Dynamics has a consensus target price of $42.00, suggesting a potential upside of 24.26%. Given Douglas Dynamics’ stronger consensus rating and higher possible upside, analysts plainly believe Douglas Dynamics is more favorable than Allison Transmission Holdings.
Allison Transmission Holdings beats Douglas Dynamics on 12 of the 17 factors compared between the two stocks.
Allison Transmission Holdings Company Profile
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.
Douglas Dynamics Company Profile
Douglas Dynamics, Inc. is a manufacturer and up-fitter of commercial vehicle attachments and equipment. The Company’s portfolio includes snow and ice management attachments sold under the BLIZZARD, FISHER, HENDERSON, SNOWEX and WESTERN brands, turf care equipment under the TURFEX brand and industrial maintenance equipment under the SWEEPEX brand. The Company operates through two segments: Work Truck Attachments and Work Truck Solutions. The Work Truck Attachments segment includes snow and ice management attachments sold under the FISHER, WESTERN, HENDERSON and SNOWEX brands. The Work Truck Solutions segment includes the up-fit of attachments and storage solutions for commercial work vehicles under the DEJANA brand and its related sub-brands. In its Work Truck Attachments segment, the Company offers a product line of snowplows, and sand and salt spreaders for light and heavy duty trucks. Its Work Truck Solutions products consist of truck and vehicle up-fits.
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