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Allison Transmission Declares Dividend of $0.15 per Share

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Price movement

Allison Transmission Holdings (ALSN) has a market cap of $4.8 billion. It fell by 0.07% to close at $28.26 per share on August 11, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 0.04%, -1.6%, and 10.5%, respectively, on the same day. ALSN is trading 2.4% below its 20-day moving average, 0.76% below its 50-day moving average, and 6.6% above its 200-day moving average.

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Related ETF and peers

The Guggenheim Mid-Cap Core ETF (CZA) invests 0.66% of its holdings in Allison Transmission. The ETF tracks the Zacks Mid-Cap Core Index, a proprietary selected portfolio of 100 midcap stocks that seeks to outperform pure market-cap indexes. The YTD price movement of CZA was 10.2% on August 11.

The market caps of Allison Transmission’s competitors are as follows:

  • Caterpillar (CAT) — $48.6 billion
  • Cummins (CMI) — $21.3 billion
  • Thor Industries (THO) — $4.0 billion

Allison Transmission declares dividend

Allison Transmission Holdings has declared a quarterly cash dividend of $0.15 per share on its common stock. The dividend will be paid on September 2, 2016, to shareholders of record at the close of business on August 22, 2016.

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Performance of Allison Transmission in 2Q16

Allison Transmission reported 2Q16 net sales of $474.9 million, a fall of 7.1% from the net sales of $511.0 million in 2Q15. The company’s gross profit margin rose by 3.2% and its operating income fell by 7.6% between 2Q15 and 2Q16.

Its net income and EPS (earnings per share) rose to $60.8 million and $0.36, respectively, in 2Q16, compared with $54.4 million and $0.30, respectively, in 2Q15. It reported adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $173.3 million in 2Q16, a fall of 6.6% from fiscal 2Q15.

ALSN’s cash and cash equivalents and inventories rose by 44.8% and 6.4%, respectively, between 4Q15 and 2Q16. Its current ratio and debt-to-equity ratio rose to 2.2x and 2.8x, respectively, in 2Q16, compared with 2.0x and 2.7x, respectively, in 4Q15. It reported adjusted free cash flow of $156.7 million in 2Q16, a rise of 13.3% over fiscal 2Q15.

Projections

The company has made the following projections for fiscal 2016:

  • net sales to decrease in the range of 9.5% to 10.5%
  • adjusted EBITDA margin in the range of 33.3% to 34.0%
  • adjusted free cash flow in the range of $415 million to $435 million
  • capital expenditures in the range of $65 million to $75 million
  • cash income tax in the range of $10 million to $15 million

In the next part of this series, we’ll discuss Dr Pepper Snapple Group.

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