Comparing Allison Transmission (NYSE:ALSN) and Miller Industries (NYSE:MLR)

Miller Industries (NYSE:MLR) and Allison Transmission (NYSE:ALSN) are both auto/tires/trucks companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, analyst recommendations, profitability and earnings.

Analyst Ratings

This is a summary of current recommendations for Miller Industries and Allison Transmission, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Miller Industries	0	2	1	0	2.33
Allison Transmission	2	6	1	0	1.89

Miller Industries presently has a consensus target price of $55.00, suggesting a potential upside of 43.12%. Allison Transmission has a consensus target price of $93.00, suggesting a potential upside of 12.77%. Given Miller Industries’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Miller Industries is more favorable than Allison Transmission.

Insider & Institutional Ownership

79.2% of Miller Industries shares are owned by institutional investors. Comparatively, 96.9% of Allison Transmission shares are owned by institutional investors. 4.4% of Miller Industries shares are owned by company insiders. Comparatively, 1.2% of Allison Transmission shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Miller Industries and Allison Transmission”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Miller Industries	$840.26 million	0.52	$63.49 million	$2.60	14.78
Allison Transmission	$3.07 billion	2.24	$731.00 million	$8.16	10.11

Allison Transmission has higher revenue and earnings than Miller Industries. Allison Transmission is trading at a lower price-to-earnings ratio than Miller Industries, indicating that it is currently the more affordable of the two stocks.

Dividends

Miller Industries pays an annual dividend of $0.80 per share and has a dividend yield of 2.1%. Allison Transmission pays an annual dividend of $1.08 per share and has a dividend yield of 1.3%. Miller Industries pays out 30.8% of its earnings in the form of a dividend. Allison Transmission pays out 13.2% 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. Miller Industries has raised its dividend for 2 consecutive years and Allison Transmission has raised its dividend for 2 consecutive years.

Volatility & Risk

Miller Industries has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500. Comparatively, Allison Transmission has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500.

Profitability

This table compares Miller Industries and Allison Transmission’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Miller Industries	4.35%	10.48%	6.33%
Allison Transmission	22.78%	41.37%	13.01%

Summary

Allison Transmission beats Miller Industries on 9 of the 15 factors compared between the two stocks.

About Miller Industries

Miller Industries, Inc., together with its subsidiaries, manufactures and sells towing and recovery equipment. The company offers wreckers that are used to recover and tow disabled vehicles and other equipment; and car carriers, which are specialized flat-bed vehicles with hydraulic tilt mechanisms, which are used to transport new or disabled vehicles and other equipment. It also provides transport trailers for moving various vehicles for auto auctions, car dealerships, leasing companies, and other similar operations. The company markets its products under the Century, Vulcan, Challenger, Holmes, Champion, Chevron, Eagle, Titan, Jige, and Boniface brands. Miller Industries, Inc. sells its products through independent distributors in North America, and Canada, Mexico; and through prime contractors to governmental entities. Miller Industries, Inc. was incorporated in 1990 and is headquartered in Ooltewah, Tennessee.

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.