CNH Industrial NV (CNHI) & Allison Transmission Holdings (ALSN) Critical Review

CNH Industrial NV (NASDAQ: CNHI) and Allison Transmission Holdings (NYSE:ALSN) are both mid-cap industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, analyst recommendations, earnings and risk.

Profitability

This table compares CNH Industrial NV and Allison Transmission Holdings’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CNH Industrial NV	0.55%	4.11%	0.27%
Allison Transmission Holdings	14.32%	31.27%	6.77%

Analyst Ratings

This is a summary of recent ratings and recommmendations for CNH Industrial NV and Allison Transmission Holdings, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CNH Industrial NV	1	4	2	0	2.14
Allison Transmission Holdings	1	6	4	1	2.42

CNH Industrial NV currently has a consensus target price of $10.97, suggesting a potential downside of 2.24%. Allison Transmission Holdings has a consensus target price of $41.13, suggesting a potential upside of 17.40%. Given Allison Transmission Holdings’ stronger consensus rating and higher probable upside, analysts plainly believe Allison Transmission Holdings is more favorable than CNH Industrial NV.

Dividends

Allison Transmission Holdings pays an annual dividend of $0.60 per share and has a dividend yield of 1.7%. CNH Industrial NV does not pay a dividend. Allison Transmission Holdings pays out 33.7% of its earnings in the form of a dividend. Allison Transmission Holdings has increased its dividend for 4 consecutive years.

Valuation & Earnings

This table compares CNH Industrial NV and Allison Transmission Holdings’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
CNH Industrial NV	$24.18 billion	0.63	$2.44 billion	N/A	N/A
Allison Transmission Holdings	$1.98 billion	2.63	$707.40 million	$1.78	19.68

CNH Industrial NV has higher revenue and earnings than Allison Transmission Holdings.

Summary

Allison Transmission Holdings beats CNH Industrial NV on 10 of the 14 factors compared between the two stocks.

CNH Industrial NV Company Profile

CNH Industrial N.V. is a capital goods company. The Company is engaged in the design, production, marketing, sale and financing of agricultural and construction equipment, trucks, commercial vehicles, buses and specialty vehicles for firefighting, defense and other uses, as well as engines, transmissions and axles for vehicles and engines under marine and power generation applications. Its segments include Agricultural Equipment, which designs, manufactures and distributes farm machinery and implements; Construction Equipment, which designs, manufactures and distributes construction equipment; Commercial Vehicles, which designs, produces and sells a range of light, medium and heavy vehicles for the transportation and distribution of goods; Powertrain, which designs, manufactures and offers a range of propulsion and transmission systems, and axles for on- and off-road applications, and Financial Services, which offers a range of financial services to dealers and customers.

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.