Head-To-Head Analysis: Allison Transmission (ALSN) versus Dorman Products (DORM)

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Allison Transmission (NYSE: ALSN) and Dorman Products (NASDAQ:DORM) are both mid-cap auto/tires/trucks companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, analyst recommendations, risk, valuation, institutional ownership and earnings.

Earnings & Valuation

This table compares Allison Transmission and Dorman Products’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Allison Transmission $2.26 billion 2.67 $504.00 million $2.66 17.41
Dorman Products $903.22 million 2.79 $106.59 million $3.37 22.54

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

Analyst Recommendations

This is a breakdown of recent recommendations for Allison Transmission and Dorman Products, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Allison Transmission 3 4 6 0 2.23
Dorman Products 0 4 0 1 2.40

Allison Transmission currently has a consensus price target of $45.64, suggesting a potential downside of 1.48%. Dorman Products has a consensus price target of $68.33, suggesting a potential downside of 10.05%. Given Allison Transmission’s higher possible upside, equities research analysts clearly believe Allison Transmission is more favorable than Dorman Products.

Volatility & Risk

Allison Transmission has a beta of 1.3, meaning that its stock price is 30% more volatile than the S&P 500. Comparatively, Dorman Products has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500.

Institutional & Insider Ownership

75.7% of Dorman Products shares are held by institutional investors. 8.4% of Allison Transmission shares are held by company insiders. Comparatively, 11.9% of Dorman Products shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Allison Transmission and Dorman Products’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Allison Transmission 25.46% 86.52% 13.07%
Dorman Products 12.42% 19.13% 16.04%

Dividends

Allison Transmission pays an annual dividend of $0.60 per share and has a dividend yield of 1.3%. Dorman Products does not pay a dividend. Allison Transmission pays out 22.6% of its earnings in the form of a dividend.

Summary

Dorman Products beats Allison Transmission on 9 of the 17 factors compared between the two stocks.

About Allison Transmission

Allison Transmission Holdings, Inc., together with its subsidiaries, designs, manufactures, and sells commercial and defense fully-automatic transmissions for medium- and heavy-duty commercial vehicles, and medium- and heavy-tactical U.S. defense vehicles worldwide. It offers 13 transmission product lines with approximately 100 product models for various applications, including distribution, refuse, construction, fire, and emergency on-highway trucks; school, transit, and hybrid-transit buses; motor homes; energy, mining, and construction off-highway vehicles and equipment; and wheeled and tracked defense vehicles. The company markets its transmissions under Allison Transmission brand name; and remanufactured transmissions under ReTran brand name. It also sells branded replacement parts, support equipment, and other products necessary to service the installed base of vehicles utilizing its transmissions, as well as defense kits, engineering services, and extended transmission coverage services to various original equipment manufacturers, distributors, and the U.S. government. The company serves customers through an independent network of approximately 1,400 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 Dorman Products

Dorman Products, Inc. supplies automotive replacement parts, automotive hardware, and brake products to the automotive aftermarket and mass merchandise markets in the United States, Canada, Mexico, Europe, the Middle East, and Australia. It offers original equipment dealer products, such as intake manifolds, exhaust manifolds, window regulators, radiator fan assemblies, tire pressure monitor sensors, exhaust gas recirculation coolers, and complex electronics modules; fluid reservoirs, variable valve timing components, complex electronics, and integrated door lock actuators; and fasteners, including oil drain plugs, wheel bolts, and wheel lug nuts. The company also provides automotive replacement parts comprising door handles, keyless remotes and cases, and door hinge repairs; and heavy duty aftermarket parts for class 4-8 vehicles comprising lighting, cooling, engine management, and cab products. In addition, it offers solutions for rugged duty and fleet applications; replacement chassis part solutions; brake hardware products; electrical components; and application specific repair hardware products. The company provides its products under the OE Solutions, HELP!, HD Solutions, Premium Chassis, Premium XL, Premium RD, MAS, FirstStop, ConductTite, and AutoGrade brands through automotive aftermarket retailers, local independent parts wholesalers, national general merchandise chain retailers, mass merchants, salvage yards, and the parts distribution systems of parts manufacturers. Dorman Products, Inc. was founded in 1978 and is headquartered in Colmar, Pennsylvania.

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