Allison Transmission Holdings Inc.
ALSN
recently announced that its board of directors has approved an increase in its quarterly dividend payout, from 19 cents to 21 cents per share on its common stock. The company declared a cash dividend of 21 cents per share for the first quarter of 2022. The payment will be made on Mar 18, 2022, to stockholders of record at the close of business on Mar 7, 2022.
This marks the third consecutive year of an increase to the quarterly dividend, which testifies the company’s commitment to prudent balance sheet management and dedicated efforts toward creating value for shareholders.
A new authorization has been announced under the company’s current stock buyback program for the repurchase of up to an additional $1 billion. This brings the total authorized amount to $4 billion.
Major OEMS Partner ALSN for its Electronic Controls Platform
In another development, ALSN has partnered with several leading global OEMs to build the first commercial vehicles equipped with its next-generation platform of electronic controls. The platform features modern-day microprocessor and software operating system technology. It is capable of delivering advanced communications, functional safety, cyber security and over-the-air programming.
Apart from Freightliner Custom Chassis Corporation, which collaborated with ALSN to build the first walk-in vans equipped with the next generation electronic controls platform, OEM partners like Mack Trucks, Prevost, and MAN are also part of the alliance. The company expects all OEM partners to transition to the platform by the end of January 2023.
The path-breaking platform will support Allison’s 1000 through 4000 Series product portfolio and its eGen Power electrified propulsion solutions.
ALSN Looks to Strengthen Footprint in the Defense Market
In recent times, Allison has recorded unprecedented growth in the global defense market. Both tracked and wheeled vehicle OEMs from Germany, South Korea, Turkey, France, Canada, Israel and the United States, powered by Allison transmissions, have secured multiple defense contracts in 2021 across Asia, Australia, Europe, the Middle East and Africa.
Allison has collaborated with German-based Rheinmetall on multiple global platforms, like the Boxer multi-role armored vehicle to achieve prominent wins in Germany, Australia, Lithuania and the U.K. It is also working in close communion with American Rheinmetall Vehicles, Raytheon, Textron, L3 Harris and a host of other industry leaders.
Allison’s collaboration with Hanwha Defense of South Korea is also noteworthy. The K9 Thunder self-propelled howitzer is a successful program that has been procured competitively in South Korea, Turkey, India, Norway, Poland, Australia, Finland, Egypt and Estonia, with additional opportunities for sales in the U.K.
The Turkish licensee, HST Otomotiv, is also working jointly with ALSN toward efforts in Turkey with key OEMs, FNSS and Otokar that have generated growth in both Turkish and export markets.
Allison has long been in a niche position in developing defense propulsion solutions that function efficiently in the toughest conditions. The multiple partnerships make the company poised for providing a premium customer experience in the future.
ALSN’s shares have lost 1.2% over the past year compared to the
industry
’s 45.9% decline. The company’s estimated earnings growth rate for the current year is pegged at 23.7%.
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Zacks Rank & Key Picks
Currently, ALSN has a Zacks Rank #3 (Hold).
Better-ranked players in the auto space include
Tesla
TSLA
,
Harley-Davidson
HOG
and
LCI Industries
LCII
, each sporting a Zacks Rank #1 (Strong Buy) currently. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Tesla has an expected earnings growth rate of 40.7% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 22.3% upward in the past 60 days.
Tesla’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. TSLA pulled off a trailing four-quarter earnings surprise of 33.3%, on average. The stock has also rallied 12.8% over a year.
Harley-Davidson has an expected earnings growth rate of 1.9% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 21.7% upward in the past 60 days.
Harley-Davison’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters. HOG pulled off a trailing four-quarter earnings surprise of 77.59%, on average. The stock has rallied 13% over a year.
LCI Industries has an expected earnings growth rate of 25.6% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 13.8% upward in the past 60 days.
LCI Industries’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in one quarter. LCII pulled off a trailing four-quarter earnings surprise of 12.86%, on average. The stock has declined 14% over a year.
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