Allison Transmission Holdings (ALSN) DIvidends Date & History

Key Takeaways

• Forward dividend yield of 0.86%, with quarterly payments of $0.29 per share.
• Recent 7% dividend increase marks the seventh consecutive year of raises.
• Ultra-low payout ratio of 14.73% signals exceptional sustainability.
• Strong free cash flow generation of $661 million in 2025 supports ongoing payouts and growth.
• Yield trails auto parts industry average of around 1.5%, but growth potential stands out.
• Last ex-dividend date was March 9, 2026.

Dividend Overview

Allison Transmission Holdings, Inc. (ALSN) maintains a modest quarterly dividend policy, currently paying $0.29 per share, which equates to a forward annual dividend of $1.16 and a yield of 0.86% based on recent trading levels around $134. The company, a leader in fully automatic transmissions for commercial and defense vehicles, has demonstrated consistent dividend growth rather than chasing high yields. This positions ALSN as a dividend growth stock, appealing to investors prioritizing payout expansion over immediate income. Payments occur quarterly, with the most recent ex-dividend date on March 9, 2026. Over the past five years, the average yield has been 1.52%, reflecting a conservative yet reliable profile amid cyclical auto parts demand.

Dividend History and Growth

ALSN has built a strong track record of dividend increases since resuming payouts post-IPO adjustments. The company announced a 7% hike in February 2026, raising the quarterly dividend from $0.27 to $0.29 per share—the seventh straight annual increase. This reflects a commitment to returning capital to shareholders, with average growth rates of about 8% over the past 12 months and higher over longer periods like 9.7% in five years. No cuts have occurred in recent history, underscoring payment consistency even through industry cycles. The strategy aligns with robust cash generation from its dominant market position in medium- and heavy-duty transmissions.

Dividend Sustainability and Payout Ratio

The dividend's sustainability is robust, underpinned by a trailing payout ratio of just 14.73% against trailing twelve-month earnings per share (EPS) of $7.34. This leaves ample room for growth and resilience against downturns. Free cash flow (FCF) further bolsters coverage, with adjusted FCF reaching $661 million in 2025 and projections of $655–$805 million for 2026. While the company carries notable debt from its capital-intensive operations, strong profitability—evidenced by a 37.5% adjusted EBITDA margin—and defense sector exposure provide stability. Overall, financials indicate the payout is well-protected.

Dividend Compared to Industry Peers

In the auto parts industry, ALSN's 0.86% forward yield is below the sector average of approximately 1.5%. Peers like BorgWarner (BWA), with a yield around 1.19%, offer higher income, while others such as American Axle (AXL) provide little to no dividend. ALSN's lower yield reflects its focus on growth and reinvestment, contrasting with higher-payout competitors in a cyclical sector.

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Is This Stock Attractive for Dividend Investors?

ALSN suits dividend growth investors seeking reliable increases over high current yields, given its seven-year streak and low 14.73% payout ratio that affords flexibility for future hikes. Conservative long-term holders may appreciate the strong FCF coverage and exposure to stable defense and commercial vehicle markets, which buffer cyclicality in auto parts. However, the modest 0.86% yield may deter pure income seekers favoring higher payers like some peers. Growth-oriented investors could value the potential for yield expansion as earnings compound, supported by market leadership. Balanced portfolios might include ALSN for diversification in industrials, but its debt levels warrant monitoring amid economic shifts. Overall, it appeals to patient investors prioritizing sustainability and compounding.

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