Head-To-Head Review: Columbus McKinnon (NASDAQ:CMCO) & Allison Transmission (NYSE:ALSN)

Columbus McKinnon (NASDAQ:CMCO) and Allison Transmission (NYSE:ALSN) are both industrials companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, profitability, earnings, valuation, analyst recommendations, risk and institutional ownership.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Columbus McKinnon	-21.25%	10.02%	2.36%
Allison Transmission	12.02%	38.18%	9.99%

Volatility & Risk

Columbus McKinnon has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500. Comparatively, Allison Transmission has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Columbus McKinnon	$1.19 billion	0.39	-$229.54 million	($7.46)	-2.15
Allison Transmission	$3.01 billion	3.09	$623.00 million	$6.29	17.92

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

Analyst Ratings

This is a summary of current recommendations and price targets for Columbus McKinnon and Allison Transmission, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Columbus McKinnon	1	1	1	2	2.80
Allison Transmission	0	5	2	1	2.50

Columbus McKinnon currently has a consensus target price of $23.00, suggesting a potential upside of 43.48%. Allison Transmission has a consensus target price of $131.17, suggesting a potential upside of 16.38%. Given Columbus McKinnon’s stronger consensus rating and higher probable upside, research analysts clearly believe Columbus McKinnon is more favorable than Allison Transmission.

Insider and Institutional Ownership

96.0% of Columbus McKinnon shares are held by institutional investors. Comparatively, 96.9% of Allison Transmission shares are held by institutional investors. 2.1% of Columbus McKinnon shares are held by company insiders. Comparatively, 1.1% of Allison Transmission shares are held 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.

Dividends

Columbus McKinnon pays an annual dividend of $0.28 per share and has a dividend yield of 1.7%. Allison Transmission pays an annual dividend of $1.16 per share and has a dividend yield of 1.0%. Columbus McKinnon pays out -3.8% of its earnings in the form of a dividend. Allison Transmission pays out 18.4% 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. Allison Transmission has increased its dividend for 2 consecutive years. Columbus McKinnon is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Allison Transmission beats Columbus McKinnon on 11 of the 18 factors compared between the two stocks.

About Columbus McKinnon

Columbus McKinnon Corporation designs, manufactures, and markets motion solutions for moving, lifting, positioning, and securing materials worldwide. It offers manual, battery, electric, and air hoists; steel, rack, and pinion jacks; winches, hydraulic jacks and tools, trolleys and its clamps, and lifting tables; skates and heavy load moving systems; material handling equipment; mobile, workplace, and jib cranes; crane components and kits; and below-the-hook lifting devices, lifting slings, and lashing systems. The company also provides linear motion products, elevator and mining drives, brakes, radio controls, collision avoidance systems, regenerative drives, AC and DC drive and motor control systems, DC motor and magnet control systems, and conductor bar systems; and underfloor lifting systems, lifting jacks, roof working platforms, hybrid lifting systems, turntables, bogie axle exchange and lifting systems, bogie lift and turn devices, and workshop equipment. In addition, it offers fabric and modular belt, and sanitary, stainless steel conveyors; pallet systems; parts and belts; rotary unions and swivel joints; check valves; accumulation and transfer tables, motion control systems, and steel and flexible chains; hooks, shackles, textile slings, clamps, and load binders; actuators and rotary unions; and push button pendant stations, collision avoidance, and power delivery subsystems. It serves EV production and aerospace, energy and utilities, process industries, industrial automation, construction and infrastructure, food and beverage, entertainment, life sciences, consumer packaged goods, and e-commerce/supply chain/warehousing markets. It offers its products to end users directly, and through distributors, independent crane builders, material handling specialists and integrators, original equipment manufacturers, government agencies, and engineering procurement and construction firms. The company was founded in 1875 and is based in Charlotte, North Carolina.

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.