Cooper Tire & Rubber (NYSE:CTB) and Allison Transmission (NYSE:ALSN) are both auto/tires/trucks companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, risk, valuation, profitability and earnings.
Volatility & Risk
Cooper Tire & Rubber 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.
Earnings & Valuation
This table compares Cooper Tire & Rubber and Allison Transmission's gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Cooper Tire & Rubber | $2.75 billion | 0.50 | $96.40 million | $1.91 | 14.31 |
| Allison Transmission | $2.70 billion | 1.52 | $604 million | $4.86 | 7.43 |
Allison Transmission has lower revenue, but higher earnings than Cooper Tire & Rubber. Allison Transmission is trading at a lower price-to-earnings ratio than Cooper Tire & Rubber, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Cooper Tire & Rubber and Allison Transmission's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Cooper Tire & Rubber | 2.92% | 6.85% | 3.13% |
| Allison Transmission | 21.65% | 78.97% | 12.87% |
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for Cooper Tire & Rubber and Allison Transmission, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Cooper Tire & Rubber | 0 | 3 | 3 | 0 | 2.50 |
| Allison Transmission | 0 | 3 | 5 | 1 | 2.78 |
Cooper Tire & Rubber presently has a consensus price target of $30.50, suggesting a potential upside of 11.60%. Allison Transmission has a consensus price target of $47.3750, suggesting a potential upside of 31.12%. Given Allison Transmission's stronger consensus rating and higher possible upside, analysts plainly believe Allison Transmission is more favorable than Cooper Tire & Rubber.
Dividends
Cooper Tire & Rubber pays an annual dividend of $0.42 per share and has a dividend yield of 1.5%. Allison Transmission pays an annual dividend of $0.68 per share and has a dividend yield of 1.9%. Cooper Tire & Rubber pays out 22.0% of its earnings in the form of a dividend. Allison Transmission pays out 14.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Allison Transmission is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional and Insider Ownership
97.1% of Cooper Tire & Rubber shares are owned by institutional investors. Comparatively, 99.2% of Allison Transmission shares are owned by institutional investors. 0.7% of Cooper Tire & Rubber shares are owned by insiders. Comparatively, 1.1% of Allison Transmission shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Summary
Allison Transmission beats Cooper Tire & Rubber on 14 of the 16 factors compared between the two stocks.
