Comparing Allison Transmission (NYSE:ALSN) & China Yuchai International (NYSE:CYD)

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

Insider and Institutional Ownership

96.9% of Allison Transmission shares are held by institutional investors. 1.2% of Allison Transmission shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Allison Transmission and China Yuchai International, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Allison Transmission	2	6	2	0	2.00
China Yuchai International	0	3	0	0	2.00

Allison Transmission presently has a consensus target price of $97.38, suggesting a potential upside of 17.57%. Given Allison Transmission’s higher probable upside, analysts clearly believe Allison Transmission is more favorable than China Yuchai International.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Allison Transmission	23.81%	45.56%	14.19%
China Yuchai International	N/A	N/A	N/A

Volatility and Risk

Allison Transmission has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500. Comparatively, China Yuchai International has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500.

Dividends

Allison Transmission pays an annual dividend of $1.08 per share and has a dividend yield of 1.3%. China Yuchai International pays an annual dividend of $0.53 per share and has a dividend yield of 1.4%. Allison Transmission pays out 12.3% of its earnings in the form of a dividend. Allison Transmission has increased its dividend for 2 consecutive years and China Yuchai International has increased its dividend for 1 consecutive years.

Valuation and Earnings

This table compares Allison Transmission and China Yuchai International”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Allison Transmission	$3.23 billion	2.15	$731.00 million	$8.80	9.41
China Yuchai International	$22.63 billion	0.06	$45.03 million	N/A	N/A

Allison Transmission has higher earnings, but lower revenue than China Yuchai International.

Summary

Allison Transmission beats China Yuchai International on 10 of the 15 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 China Yuchai International

China Yuchai International Limited, through its subsidiaries, manufactures, assembles, and sells diesel and natural gas engines for trucks, buses and passenger vehicles, marine, industrial, construction, agriculture, and generator set applications in the People’s Republic of China and internationally. It operates through two segments, Yuchai and HLGE. The Yuchai segment manufactures on- and off-road powertrain solutions and applications. The HLGE is engaged in hospitality and property development activities. The company provides diesel engines comprising 4- and 6-cylinder diesel engines, high horsepower marine diesel engines, and power generator engines; natural gas engines, methanol combustion engines, diesel power generators, diesel engine parts, and remanufacturing services; as well as plug in hybrid engines, range extenders, power generation powertrains, hybrid powertrains, integrated electric drive axel powertrains, and fuel cell systems. It also offers maintenance and retrofitting services. It distributes its engines directly to auto original equipment manufacturers, agents, and retailers. The company was founded in 1951 and is based in Singapore.