Analyzing Aebi Schmidt (NASDAQ:AEBI) & Allison Transmission (NYSE:ALSN)

Allison Transmission (NYSE:ALSN) and Aebi Schmidt (NASDAQ:AEBI) are both industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, dividends, analyst recommendations, valuation and earnings.

Insider and Institutional Ownership

96.9% of Allison Transmission shares are held by institutional investors. 1.1% of Allison Transmission shares are held by insiders. Comparatively, 39.1% of Aebi Schmidt shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Allison Transmission has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500. Comparatively, Aebi Schmidt has a beta of 2.59, suggesting that its share price is 159% more volatile than the S&P 500.

Dividends

Allison Transmission pays an annual dividend of $1.16 per share and has a dividend yield of 1.1%. Aebi Schmidt pays an annual dividend of $0.10 per share and has a dividend yield of 0.9%. Allison Transmission pays out 18.4% of its earnings in the form of a dividend. Aebi Schmidt pays out 31.2% 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. Allison Transmission has increased its dividend for 2 consecutive years. Allison Transmission is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Allison Transmission	12.02%	38.18%	9.99%
Aebi Schmidt	1.09%	2.59%	1.04%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Allison Transmission and Aebi Schmidt, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Allison Transmission	0	4	3	2	2.78
Aebi Schmidt	0	1	2	0	2.67

Allison Transmission currently has a consensus target price of $130.14, indicating a potential upside of 18.49%. Aebi Schmidt has a consensus target price of $17.00, indicating a potential upside of 54.26%. Given Aebi Schmidt’s higher probable upside, analysts plainly believe Aebi Schmidt is more favorable than Allison Transmission.

Earnings and Valuation

This table compares Allison Transmission and Aebi Schmidt”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Allison Transmission	$3.01 billion	3.01	$623.00 million	$6.29	17.46
Aebi Schmidt	$1.53 billion	0.56	$9.74 million	$0.32	34.44

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

Summary

Allison Transmission beats Aebi Schmidt on 14 of the 18 factors compared between the two stocks.

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.

About Aebi Schmidt

Aebi Schmidt Holding AG is a provider of mission-critical infrastructure, environmental and agricultural solutions. Aebi Schmidt Holding AG, formerly known as The Shyft Group Inc., is based in NOVI, Mich.