American Axle & Manufacturing (NYSE:AXL) and Allison Transmission (NYSE:ALSN) are both auto/tires/trucks companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.
Insider & Institutional Ownership
87.3% of American Axle & Manufacturing shares are held by institutional investors. Comparatively, 98.0% of Allison Transmission shares are held by institutional investors. 1.5% of American Axle & Manufacturing 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.
Volatility and Risk
American Axle & Manufacturing has a beta of 2.69, indicating that its stock price is 169% more volatile than the S&P 500. Comparatively, Allison Transmission has a beta of 1.23, indicating that its stock price is 23% more volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for American Axle & Manufacturing and Allison Transmission, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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American Axle & Manufacturing | 2 | 5 | 2 | 0 | 2.00 |
Allison Transmission | 1 | 4 | 2 | 1 | 2.38 |
American Axle & Manufacturing presently has a consensus target price of $10.25, suggesting a potential upside of 10.57%. Allison Transmission has a consensus target price of $44.50, suggesting a potential upside of 0.41%. Given American Axle & Manufacturing's higher possible upside, equities analysts plainly believe American Axle & Manufacturing is more favorable than Allison Transmission.
Profitability
This table compares American Axle & Manufacturing and Allison Transmission's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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American Axle & Manufacturing | -22.36% | -6.21% | -0.48% |
Allison Transmission | 16.00% | 46.60% | 7.57% |
Earnings & Valuation
This table compares American Axle & Manufacturing and Allison Transmission's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
American Axle & Manufacturing | $6.53 billion | 0.16 | $-484,500,000.00 | $1.62 | 5.72 |
Allison Transmission | $2.70 billion | 1.83 | $604 million | $4.86 | 9.12 |
Allison Transmission has lower revenue, but higher earnings than American Axle & Manufacturing. American Axle & Manufacturing 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 American Axle & Manufacturing on 10 of the 14 factors compared between the two stocks.