Is NYSE:CMI a Good Fit for Dividend Investing?

Discover CUMMINS INC (NYSE:CMI)—a stock that our stock screener has recognized as a solid dividend pick with strong fundamentals. NYSE:CMI showcases decent financial health and profitability while providing a sustainable dividend. We'll explore the specifics further.

Assessing Dividend Metrics for NYSE:CMI

ChartMill employs its own Dividend Rating system for all stocks. This score, on a scale of 0 to 10, is determined by evaluating different dividend factors, such as yield, historical performance, dividend growth, and sustainability. NYSE:CMI has been assigned a 7 for dividend:

• Compared to an average industry Dividend Yield of 1.70, CMI pays a better dividend. On top of this CMI pays more dividend than 91.67% of the companies listed in the same industry.
• On average, the dividend of CMI grows each year by 7.48%, which is quite nice.
• CMI has paid a dividend for at least 10 years, which is a reliable track record.
• CMI has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
• 32.36% of the earnings are spent on dividend by CMI. This is a low number and sustainable payout ratio.

Assessing Health Metrics for NYSE:CMI

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NYSE:CMI has earned a 5 out of 10:

• An Altman-Z score of 3.36 indicates that CMI is not in any danger for bankruptcy at the moment.
• CMI has a Altman-Z score of 3.36. This is in the better half of the industry: CMI outperforms 60.61% 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 has a better Debt to FCF ratio (3.38) than 68.18% of its industry peers.

Looking at the Profitability

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:CMI, the assigned 7 is noteworthy for profitability:

• CMI has a Return On Assets of 8.71%. This is in the better half of the industry: CMI outperforms 74.24% of its industry peers.
• CMI has a better Return On Equity (26.24%) than 87.88% of its industry peers.
• With a decent Return On Invested Capital value of 11.30%, CMI is doing good in the industry, outperforming 72.73% of the companies in the same industry.
• 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 has a Profit Margin of 8.40%. This is in the better half of the industry: CMI outperforms 67.42% of its industry peers.
• In the last couple of years the Profit Margin of CMI has grown nicely.

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Check the latest full fundamental report of CMI for a complete fundamental analysis.

Keep in mind

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.