Allison Transmission (NYSE:ALSN) & PHINIA (NYSE:PHIN) Head-To-Head Review

PHINIA (NYSE:PHIN) and Allison Transmission (NYSE:ALSN) are both auto/tires/trucks companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, risk, analyst recommendations, profitability, valuation and dividends.

Dividends

PHINIA pays an annual dividend of $1.00 per share and has a dividend yield of 1.9%. Allison Transmission pays an annual dividend of $1.00 per share and has a dividend yield of 0.8%. PHINIA pays out 42.9% of its earnings in the form of a dividend. Allison Transmission pays out 12.2% 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.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PHINIA	$3.50 billion	0.62	$102.00 million	$2.33	22.10
Allison Transmission	$3.04 billion	3.41	$673.00 million	$8.21	14.55

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

Institutional & Insider Ownership

90.9% of PHINIA shares are owned by institutional investors. Comparatively, 96.9% of Allison Transmission shares are owned by institutional investors. 1.5% of PHINIA shares are owned by insiders. Comparatively, 0.9% of Allison Transmission shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

PHINIA has a beta of 1.35, suggesting that its stock price is 35% more volatile than the S&P 500. Comparatively, Allison Transmission has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for PHINIA and Allison Transmission, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PHINIA	0	1	1	0	2.50
Allison Transmission	2	4	2	0	2.00

PHINIA currently has a consensus price target of $53.50, suggesting a potential upside of 3.91%. Allison Transmission has a consensus price target of $101.38, suggesting a potential downside of 15.14%. Given PHINIA’s stronger consensus rating and higher possible upside, equities research analysts plainly believe PHINIA is more favorable than Allison Transmission.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
PHINIA	3.10%	9.79%	4.42%
Allison Transmission	22.66%	51.13%	14.08%

Summary

Allison Transmission beats PHINIA on 9 of the 16 factors compared between the two stocks.

About PHINIA

PHINIA Inc. engages in the development, design, and manufacture of integrated components and systems that optimize performance, increase efficiency, and reduce emissions in combustion and hybrid propulsion for commercial and light vehicles, and industrial applications. The company operates through Fuel Systems and Aftermarket segments. The Fuel Systems segment provides advanced fuel injection systems, including pumps, injectors, fuel rail assemblies, and engine control modules; fuel delivery modules; canisters; sensors; and electronic control modules. The segment also offers complete systems comprising associated software and calibration services, that reduce emissions and improve fuel economy for traditional and hybrid applications. The Aftermarket segment is involved in the sale of starters, alternators, and other new and remanufactured products, as well as maintenance, test equipment, and vehicle diagnostics solutions. It servs original equipment manufacturers of passenger cars, trucks, vans, sport-utility vehicles, medium-duty and heavy-duty trucks, and buses, as well as other off-highway construction, marine, and agricultural and industrial applications. PHINIA Inc. was incorporated in 2023 and is based in Auburn Hills, Michigan.

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.