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Allison (ALSN) Declares Share Repurchase Program & Dividend

Zacks Equity Research

Allison Transmission Holdings, Inc. ALSN made the announcement of repurchasing 4,977,043 common shares from Ashe Capital Management, LP for approximately $232 million, at a price of $46.70 per share. Upon the closing of the transaction, Ashe Capital owns around 4.1% of the company’s common shares.

Also, Allison’s board approved a new stock repurchase authorization program of up to additional $1 billion. This brings the total amount of authorization under this program to $3 billion. The company’s board also declared a cash dividend of 15 cents per share for second-quarter 2019. The dividend will be paid on May 31 to shareholders of record as of May 20. Notably, before this, it announced a dividend of 15 cents per share on Feb 21, 2019.

These share repurchase program and dividend announcements are likely to instill investor confidence. Payment of any future dividends will depend upon Allison’s financial strength, results of operations, cash and capital position, and other such factors.

Over the past three months, its shares have underperformed the industry it belongs to. Over this period, shares of the company declined 5.7% while the industry decreased 1.5%.



The company currently carries a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the auto space are AB Volvo VLVLY, Fox Factory Holding Corp. FOXF and PACCAR Inc. PCAR. While Volvo currently sports a Zacks Rank #1 (Strong Buy), Fox Factory and PACCAR carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Volvo has an expected long-term growth rate of 5%. Over the past three months, shares of the company have gained 3.8%.

Fox Factory has an expected long-term growth rate of 16.4%. Over the past three months, shares of the company have gained 26.9%.

PACCAR has an expected long-term growth rate of 6.4%. Share price of the company has increased 3.9% in the past three months.

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