Financial Analysis: Allison Transmission Holdings (ALSN) vs. Navistar International Corporation (NAV)
Allison Transmission Holdings (NYSE: ALSN) and Navistar International Corporation (NYSE:NAV) are both mid-cap auto/tires/trucks companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, analyst recommendations, profitability, risk and earnings.
Valuation & Earnings
This table compares Allison Transmission Holdings and Navistar International Corporation’s 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||2.61||$707.40 million||$1.78||19.51|
|Navistar International Corporation||$7.91 billion||0.42||$260.00 million||($2.46)||-13.89|
Allison Transmission Holdings has higher revenue, but lower earnings than Navistar International Corporation. Navistar International Corporation is trading at a lower price-to-earnings ratio than Allison Transmission Holdings, indicating that it is currently the more affordable of the two stocks.
Allison Transmission Holdings pays an annual dividend of $0.60 per share and has a dividend yield of 1.7%. Navistar International Corporation does not pay a dividend. Allison Transmission Holdings pays out 33.7% of its earnings in the form of a dividend. Navistar International Corporation has raised its dividend for 4 consecutive years.
Insider & Institutional Ownership
84.1% of Navistar International Corporation shares are held by institutional investors. 7.9% of Allison Transmission Holdings shares are held by insiders. Comparatively, 21.8% of Navistar International Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Risk and Volatility
Allison Transmission Holdings has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500. Comparatively, Navistar International Corporation has a beta of 2.71, suggesting that its share price is 171% more volatile than the S&P 500.
This table compares Allison Transmission Holdings and Navistar International Corporation’s 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%|
|Navistar International Corporation||-2.66%||N/A||-2.88%|
This is a breakdown of current recommendations and price targets for Allison Transmission Holdings and Navistar International Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Allison Transmission Holdings||1||6||4||1||2.42|
|Navistar International Corporation||2||8||3||0||2.08|
Allison Transmission Holdings currently has a consensus price target of $40.38, suggesting a potential upside of 16.25%. Navistar International Corporation has a consensus price target of $27.00, suggesting a potential downside of 20.96%. Given Allison Transmission Holdings’ stronger consensus rating and higher possible upside, analysts plainly believe Allison Transmission Holdings is more favorable than Navistar International Corporation.
Allison Transmission Holdings beats Navistar International Corporation on 11 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.
Navistar International Corporation Company Profile
Navistar International Corporation is a holding company whose principal operating entities are Navistar, Inc. and Navistar Financial Corporation (NFC). The Company’s segments include Truck, Parts, Global Operations (collectively, Manufacturing operations) and Financial Services, which consists of NFC and its foreign finance operations (collectively, Financial Services operations). The Truck segment manufactures and distributes Class 4 through 8 trucks, buses and military vehicles under the International and IC Bus brands, along with production of engines. The Parts segment supports its brands of International commercial trucks, IC buses and engines. The Global Operations segment includes operations of its subsidiary, International Industria de Motores da America do Sul Ltda. (IIAA). The Financial Services segment provides and manages retail, wholesale and lease financing of products sold by the Truck and Parts segments and their dealers.
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