Dorman Products (NASDAQ:DORM) and Allison Transmission (NYSE:ALSN) 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, valuation, dividends, institutional ownership, risk, earnings and analyst recommendations.
Earnings and Valuation
This table compares Dorman Products and Allison Transmission's revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Dorman Products | $991.33 million | 3.43 | $83.76 million | $2.65 | 39.91 |
Allison Transmission | $2.70 billion | 1.79 | $604 million | $4.86 | 8.92 |
Allison Transmission has higher revenue and earnings than Dorman Products. Allison Transmission is trading at a lower price-to-earnings ratio than Dorman Products, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Dorman Products has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, Allison Transmission has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500.
Insider & Institutional Ownership
76.5% of Dorman Products shares are held by institutional investors. Comparatively, 98.0% of Allison Transmission shares are held by institutional investors. 11.1% of Dorman Products shares are held by insiders. Comparatively, 1.1% of Allison Transmission shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Profitability
This table compares Dorman Products and Allison Transmission's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Dorman Products | 8.58% | 11.24% | 7.95% |
Allison Transmission | 16.00% | 46.60% | 7.57% |
Analyst Recommendations
This is a summary of current ratings for Dorman Products and Allison Transmission, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Dorman Products | 0 | 1 | 0 | 0 | 2.00 |
Allison Transmission | 1 | 4 | 2 | 1 | 2.38 |
Dorman Products presently has a consensus target price of $60.00, indicating a potential downside of 43.26%. Allison Transmission has a consensus target price of $44.50, indicating a potential upside of 2.63%. Given Allison Transmission's stronger consensus rating and higher possible upside, analysts plainly believe Allison Transmission is more favorable than Dorman Products.
Summary
Allison Transmission beats Dorman Products on 11 of the 15 factors compared between the two stocks.