Art’s-Way Manufacturing (NASDAQ:ARTW – Get Free Report) and Allison Transmission (NYSE:ALSN – Get Free Report) are both industrials companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, analyst recommendations, profitability, dividends and risk.
Insider and Institutional Ownership
2.9% of Art’s-Way Manufacturing shares are owned by institutional investors. Comparatively, 96.9% of Allison Transmission shares are owned by institutional investors. 51.5% of Art’s-Way Manufacturing shares are owned by company insiders. Comparatively, 1.1% of Allison Transmission shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Analyst Ratings
This is a summary of current recommendations and price targets for Art’s-Way Manufacturing and Allison Transmission, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Art’s-Way Manufacturing | 1 | 0 | 0 | 0 | 1.00 |
| Allison Transmission | 0 | 5 | 2 | 1 | 2.50 |
Profitability
This table compares Art’s-Way Manufacturing and Allison Transmission’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Art’s-Way Manufacturing | -0.08% | -0.16% | -0.10% |
| Allison Transmission | 12.02% | 38.18% | 9.99% |
Dividends
Art’s-Way Manufacturing pays an annual dividend of $0.05 per share and has a dividend yield of 1.5%. Allison Transmission pays an annual dividend of $1.16 per share and has a dividend yield of 1.0%. Art’s-Way Manufacturing pays out -500.0% 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. Art’s-Way Manufacturing is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings & Valuation
This table compares Art’s-Way Manufacturing and Allison Transmission”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Art’s-Way Manufacturing | $25.99 million | 0.66 | $1.03 million | ($0.01) | -328.00 |
| Allison Transmission | $3.01 billion | 3.09 | $623.00 million | $6.29 | 17.92 |
Allison Transmission has higher revenue and earnings than Art’s-Way Manufacturing. Art’s-Way Manufacturing is trading at a lower price-to-earnings ratio than Allison Transmission, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Art’s-Way Manufacturing has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500. Comparatively, Allison Transmission has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500.
Summary
Allison Transmission beats Art’s-Way Manufacturing on 14 of the 18 factors compared between the two stocks.
About Art’s-Way Manufacturing
Art’s-Way Manufacturing Co., Inc. manufactures and distributes farm equipment products. It operates through the Agricultural Products, and Modular Buildings segments. The Agricultural Products segment manufactures a variety of specialized farm machinery under its own label including portable and stationary animal feed processing equipment and related attachments used to mill and mix feed grains into custom animal feed rations, a line of forage equipment consisting of forage boxes, bale processors, running gear, and dump boxes, a line of manure spreaders, sugar beet harvesting equipment, and a line of dirt work equipment. The Modular Buildings segment produces and sells modular buildings, which are custom designed to meet the specific research needs of its customers. It also provides services relating to the design, manufacturing, delivery, installation and renting of the building units that it produces. The company was founded by Arthur Luscombe in 1956 and is headquartered in Armstrong, IA.
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.
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