Allison Transmission (NYSE:ALSN) vs. ITT (NYSE:ITT) Financial Comparison

ITT (NYSE:ITT) and Allison Transmission (NYSE:ALSN) are both industrials 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
ITT	8.07%	15.66%	7.50%
Allison Transmission	11.12%	42.33%	10.26%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for ITT and Allison Transmission, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ITT	0	1	8	0	2.89
Allison Transmission	0	3	4	2	2.89

ITT presently has a consensus price target of $260.22, suggesting a potential upside of 33.08%. Allison Transmission has a consensus price target of $133.57, suggesting a potential upside of 14.79%. Given ITT’s higher possible upside, research analysts plainly believe ITT is more favorable than Allison Transmission.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ITT	$3.94 billion	4.44	$488.00 million	$4.86	40.23
Allison Transmission	$3.01 billion	3.19	$623.00 million	$6.96	16.72

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

Dividends

ITT pays an annual dividend of $1.54 per share and has a dividend yield of 0.8%. Allison Transmission pays an annual dividend of $1.16 per share and has a dividend yield of 1.0%. ITT pays out 31.7% of its earnings in the form of a dividend. Allison Transmission pays out 16.7% 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. ITT has raised its dividend for 10 consecutive years and Allison Transmission has raised its dividend for 2 consecutive years. Allison Transmission is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

ITT has a beta of 1.25, suggesting that its share price is 25% more volatile than the S&P 500. Comparatively, Allison Transmission has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500.

Insider & Institutional Ownership

91.6% of ITT shares are owned by institutional investors. Comparatively, 96.9% of Allison Transmission shares are owned by institutional investors. 0.9% of ITT shares are owned by company insiders. Comparatively, 1.1% of Allison Transmission shares are owned by company 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 ITT on 10 of the 17 factors compared between the two stocks.

About ITT

ITT Inc., together with its subsidiaries, manufactures and sells engineered critical components and customized technology solutions for the transportation, industrial, and energy markets in the United States and internationally. The Motion Technologies segment manufactures brake pads, shims, shock absorbers, and energy absorption components; and sealing technologies primarily for the transportation industry, including passenger cars, trucks, light- and heavy-duty commercial and military vehicles, buses, and trains. This segment sells its products under ITT Friction Technologies, KONI, Wolverine Advanced Materials, Axtone, Novitek, and GALT. brand names. The Industrial Process segment provides industrial pumps, valves, and plant optimization and remote monitoring systems and services; and aftermarket solutions, such as replacement parts and services. It serves various customers in industries, such as chemical, energy, mining, and other industrial process markets. This segment sells its products under Goulds Pumps, Bornemann, Engineered Valves, PRO Services, C'treat, i-ALERT, Rheinhütte Pumpen, and Habonim brand names. The Connect & Control Technologies segment designs and manufactures a range of engineered connectors and specialized products for critical applications supporting various markets, including aerospace and defense, industrial, transportation, medical, and energy. This segment provides connector products, such as circular, rectangular, radio frequency, fiber optic, D-sub miniature, micro-miniature, and cable assemblies; and control products consist of highly engineered actuation, flow control, energy absorption, environmental control, and composite component solutions for the aerospace, defense, and industrial markets under Cannon, VEAM, BIW Connector Systems, Aerospace Controls, Enidine, Compact Automation, Neo-Dyn Process Controls, Conoflow, and Micro-Mode brand names. The company was incorporated in 1920 and is headquartered in Stamford, Connecticut.

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.