NYSE:CMI stands out as a stock that provides good value for the fundamentals it showcases.

Last update: Nov 23, 2023

Our stock screener has singled out CUMMINS INC (NYSE:CMI) as a stellar value proposition. NYSE:CMI not only scores well in profitability, solvency, and liquidity but also maintains a very reasonable price point. We'll explore this further.

Valuation Assessment of NYSE:CMI

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NYSE:CMI has achieved a 7 out of 10:

A Price/Earnings ratio of 11.44 indicates a reasonable valuation of CMI.
Compared to the rest of the industry, the Price/Earnings ratio of CMI indicates a somewhat cheap valuation: CMI is cheaper than 79.39% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of CMI to the average of the S&P500 Index (24.54), we can say CMI is valued rather cheaply.
With a Price/Forward Earnings ratio of 11.43, the valuation of CMI can be described as very reasonable.
Based on the Price/Forward Earnings ratio, CMI is valued a bit cheaper than 76.34% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 19.58. CMI is valued slightly cheaper when compared to this.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CMI indicates a somewhat cheap valuation: CMI is cheaper than 78.63% of the companies listed in the same industry.
77.86% of the companies in the same industry are more expensive than CMI, based on the Price/Free Cash Flow ratio.
CMI's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
CMI has a very decent profitability rating, which may justify a higher PE ratio.

Assessing Profitability for NYSE:CMI

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:CMI was assigned a score of 7 for profitability:

CMI has a Return On Assets of 8.71%. This is in the better half of the industry: CMI outperforms 74.05% of its industry peers.
The Return On Equity of CMI (26.24%) is better than 88.55% of its industry peers.
CMI's Return On Invested Capital of 11.30% is fine compared to the rest of the industry. CMI outperforms 73.28% of its industry peers.
The last Return On Invested Capital (11.30%) for CMI is above the 3 year average (9.47%), which is a sign of increasing profitability.
CMI's Profit Margin of 8.40% is fine compared to the rest of the industry. CMI outperforms 67.18% of its industry peers.
CMI's Profit Margin has improved in the last couple of years.

Health Examination for NYSE:CMI

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:CMI scores a 5 out of 10:

An Altman-Z score of 3.30 indicates that CMI is not in any danger for bankruptcy at the moment.
CMI has a Altman-Z score of 3.30. This is in the better half of the industry: CMI outperforms 61.07% of its industry peers.
The Debt to FCF ratio of CMI is 3.38, which is a good value as it means it would take CMI, 3.38 years of fcf income to pay off all of its debts.
CMI's Debt to FCF ratio of 3.38 is fine compared to the rest of the industry. CMI outperforms 69.47% of its industry peers.

Evaluating Growth: NYSE:CMI

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NYSE:CMI, the assigned 5 reflects its growth potential:

CMI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 35.03%, which is quite impressive.
The Earnings Per Share has been growing by 8.83% on average over the past years. This is quite good.
CMI shows a strong growth in Revenue. In the last year, the Revenue has grown by 27.29%.

More Decent Value stocks can be found in our Decent Value screener.

For an up to date full fundamental analysis you can check the fundamental report of CMI

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.