CUMMINS INC (CMI)
US2310211063 - Common Stock
We assign a fundamental rating of 4 out of 10 to CMI. CMI was compared to 132 industry peers in the Machinery industry. CMI has a medium profitability rating, but doesn't score so well on its financial health evaluation. CMI has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
CMI had positive earnings in the past year.
In the past year CMI had a positive cash flow from operations.
CMI had positive earnings in each of the past 5 years.
CMI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 6.54%, CMI is in the better half of the industry, outperforming 65.38% of the companies in the same industry.
CMI has a Return On Equity of 20.33%. This is amongst the best in the industry. CMI outperforms 82.31% of its industry peers.
CMI has a Return On Invested Capital of 9.81%. This is in the better half of the industry: CMI outperforms 68.46% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CMI is below the industry average of 10.90%.
The last Return On Invested Capital (9.81%) for CMI is above the 3 year average (8.89%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.54% | ||
| ROE | 20.33% | ||
| ROIC | 9.81% |
ROA(3y)6.13%
ROA(5y)7.55%
ROE(3y)19.14%
ROE(5y)21.94%
ROIC(3y)8.89%
ROIC(5y)9.03%
1.3 Margins
CMI has a Profit Margin (6.13%) which is comparable to the rest of the industry.
CMI's Profit Margin has declined in the last couple of years.
CMI has a Operating Margin (10.01%) which is in line with its industry peers.
CMI's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 24.58%, CMI is doing worse than 63.08% of the companies in the same industry.
CMI's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.01% | ||
| PM (TTM) | 6.13% | ||
| GM | 24.58% |
OM growth 3Y1.52%
OM growth 5Y-0.76%
PM growth 3Y-37.95%
PM growth 5Y-24.86%
GM growth 3Y-0.66%
GM growth 5Y0.07%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so CMI is still creating some value.
Compared to 1 year ago, CMI has more shares outstanding
CMI has less shares outstanding than it did 5 years ago.
The debt/assets ratio for CMI has been reduced compared to a year ago.
2.2 Solvency
CMI has an Altman-Z score of 3.79. This indicates that CMI is financially healthy and has little risk of bankruptcy at the moment.
CMI's Altman-Z score of 3.79 is fine compared to the rest of the industry. CMI outperforms 61.54% of its industry peers.
CMI has a debt to FCF ratio of 22.51. This is a negative value and a sign of low solvency as CMI would need 22.51 years to pay back of all of its debts.
CMI has a worse Debt to FCF ratio (22.51) than 62.31% of its industry peers.
A Debt/Equity ratio of 0.67 indicates that CMI is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.67, CMI is not doing good in the industry: 67.69% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | 22.51 | ||
| Altman-Z | 3.79 |
ROIC/WACC1.12
WACC8.73%
2.3 Liquidity
A Current Ratio of 1.32 indicates that CMI should not have too much problems paying its short term obligations.
CMI has a worse Current ratio (1.32) than 83.85% of its industry peers.
CMI has a Quick Ratio of 1.32. This is a bad value and indicates that CMI is not financially healthy enough and could expect problems in meeting its short term obligations.
CMI has a Quick ratio of 0.79. This is amonst the worse of the industry: CMI underperforms 81.54% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.32 | ||
| Quick Ratio | 0.79 |
3. Growth
3.1 Past
CMI shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.91%.
CMI shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.29% yearly.
The Revenue has been growing slightly by 2.72% in the past year.
Measured over the past years, CMI shows a small growth in Revenue. The Revenue has been growing by 7.46% on average per year.
EPS 1Y (TTM)2.91%
EPS 3Y16.69%
EPS 5Y6.29%
EPS Q2Q%27.67%
Revenue 1Y (TTM)2.72%
Revenue growth 3Y19.8%
Revenue growth 5Y7.46%
Sales Q2Q%0.3%
3.2 Future
The Earnings Per Share is expected to grow by 4.72% on average over the next years.
CMI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.73% yearly.
EPS Next Y10.04%
EPS Next 2Y8.7%
EPS Next 3Y12.29%
EPS Next 5Y4.72%
Revenue Next Year0.46%
Revenue Next 2Y1.64%
Revenue Next 3Y3.93%
Revenue Next 5Y3.73%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 17.40 indicates a rather expensive 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 72.31% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.73. CMI is valued slightly cheaper when compared to this.
CMI is valuated correctly with a Price/Forward Earnings ratio of 15.52.
72.31% of the companies in the same industry are more expensive than CMI, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of CMI to the average of the S&P500 Index (22.83), we can say CMI is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.4 | ||
| Fwd PE | 15.52 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CMI indicates a somewhat cheap valuation: CMI is cheaper than 68.46% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, CMI is valued a bit more expensive than the industry average as 65.38% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 142.95 | ||
| EV/EBITDA | 11.36 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
CMI has a very decent profitability rating, which may justify a higher PE ratio.
CMI's earnings are expected to grow with 12.29% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.73
PEG (5Y)2.76
EPS Next 2Y8.7%
EPS Next 3Y12.29%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.08%, CMI has a reasonable but not impressive dividend return.
CMI's Dividend Yield is rather good when compared to the industry average which is at 1.69. CMI pays more dividend than 89.23% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, CMI has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.08% |
5.2 History
On average, the dividend of CMI grows each year by 7.96%, which is quite nice.
CMI has paid a dividend for at least 10 years, which is a reliable track record.
CMI has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)7.96%
Div Incr Years19
Div Non Decr Years20
5.3 Sustainability
45.64% of the earnings are spent on dividend by CMI. This is a bit on the high side, but may be sustainable.
CMI's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP45.64%
EPS Next 2Y8.7%
EPS Next 3Y12.29%
CUMMINS INC
NYSE:CMI (12/20/2024, 8:04:00 PM)
After market: 351.38 0 (0%)351.38
+1.68 (+0.48%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners87.29%
Inst Owner Change3.37%
Ins Owners0.25%
Ins Owner Change0.18%
Market Cap48.17B
Analysts70
Price Target373.92 (6.41%)
Short Float %1.25%
Short Ratio2.74
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.08% |
Dividend Growth(5Y)7.96%
DP45.64%
Div Incr Years19
Div Non Decr Years20
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)14.58%
Min EPS beat(2)8.34%
Max EPS beat(2)20.82%
EPS beat(4)2
Avg EPS beat(4)3.83%
Min EPS beat(4)-12.31%
Max EPS beat(4)20.82%
EPS beat(8)3
Avg EPS beat(8)2.51%
EPS beat(12)5
Avg EPS beat(12)-0.97%
EPS beat(16)8
Avg EPS beat(16)1.01%
Revenue beat(2)2
Avg Revenue beat(2)2.66%
Min Revenue beat(2)0.94%
Max Revenue beat(2)4.38%
Revenue beat(4)3
Avg Revenue beat(4)1.92%
Min Revenue beat(4)-1.54%
Max Revenue beat(4)4.38%
Revenue beat(8)7
Avg Revenue beat(8)2.73%
Revenue beat(12)10
Avg Revenue beat(12)2.83%
Revenue beat(16)14
Avg Revenue beat(16)3.71%
PT rev (1m)10.62%
PT rev (3m)13.81%
EPS NQ rev (1m)0%
EPS NQ rev (3m)13.85%
EPS NY rev (1m)-0.26%
EPS NY rev (3m)5.9%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.87%
Revenue NY rev (1m)0.29%
Revenue NY rev (3m)0.66%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.4 | ||
| Fwd PE | 15.52 | ||
| P/S | 1.41 | ||
| P/FCF | 142.95 | ||
| P/OCF | 31.61 | ||
| P/B | 4.67 | ||
| P/tB | 8.85 | ||
| EV/EBITDA | 11.36 |
EPS(TTM)20.19
EY5.75%
EPS(NY)22.64
Fwd EY6.44%
FCF(TTM)2.46
FCFY0.7%
OCF(TTM)11.12
OCFY3.16%
SpS249.44
BVpS75.24
TBVpS39.69
PEG (NY)1.73
PEG (5Y)2.76
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.54% | ||
| ROE | 20.33% | ||
| ROCE | 16.73% | ||
| ROIC | 9.81% | ||
| ROICexc | 10.89% | ||
| ROICexgc | 14.34% | ||
| OM | 10.01% | ||
| PM (TTM) | 6.13% | ||
| GM | 24.58% | ||
| FCFM | 0.99% |
ROA(3y)6.13%
ROA(5y)7.55%
ROE(3y)19.14%
ROE(5y)21.94%
ROIC(3y)8.89%
ROIC(5y)9.03%
ROICexc(3y)10.4%
ROICexc(5y)10.63%
ROICexgc(3y)13.63%
ROICexgc(5y)13.51%
ROCE(3y)15.01%
ROCE(5y)15%
ROICexcg growth 3Y13.5%
ROICexcg growth 5Y0.91%
ROICexc growth 3Y8.62%
ROICexc growth 5Y-1.83%
OM growth 3Y1.52%
OM growth 5Y-0.76%
PM growth 3Y-37.95%
PM growth 5Y-24.86%
GM growth 3Y-0.66%
GM growth 5Y0.07%
F-Score5
Asset Turnover1.07
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | 22.51 | ||
| Debt/EBITDA | 1.55 | ||
| Cap/Depr | 112.19% | ||
| Cap/Sales | 3.47% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 34.02% | ||
| Profit Quality | 16.07% | ||
| Current Ratio | 1.32 | ||
| Quick Ratio | 0.79 | ||
| Altman-Z | 3.79 |
F-Score5
WACC8.73%
ROIC/WACC1.12
Cap/Depr(3y)118.01%
Cap/Depr(5y)110.96%
Cap/Sales(3y)3.37%
Cap/Sales(5y)3.26%
Profit Quality(3y)164.06%
Profit Quality(5y)143.73%
High Growth Momentum
Growth
EPS 1Y (TTM)2.91%
EPS 3Y16.69%
EPS 5Y6.29%
EPS Q2Q%27.67%
EPS Next Y10.04%
EPS Next 2Y8.7%
EPS Next 3Y12.29%
EPS Next 5Y4.72%
Revenue 1Y (TTM)2.72%
Revenue growth 3Y19.8%
Revenue growth 5Y7.46%
Sales Q2Q%0.3%
Revenue Next Year0.46%
Revenue Next 2Y1.64%
Revenue Next 3Y3.93%
Revenue Next 5Y3.73%
EBIT growth 1Y3.13%
EBIT growth 3Y21.62%
EBIT growth 5Y6.64%
EBIT Next Year34.09%
EBIT Next 3Y17.18%
EBIT Next 5Y5.57%
FCF growth 1Y-66.03%
FCF growth 3Y8.64%
FCF growth 5Y11.55%
OCF growth 1Y-18.81%
OCF growth 3Y13.37%
OCF growth 5Y10.77%