CUMMINS INC (CMI) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:CMI - US2310211063 - Common Stock
505.42 USD
-17.99 (-3.44%)
CMI gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 130 industry peers in the Machinery industry. While CMI has a great profitability rating, there are some minor concerns on its financial health. CMI is not valued too expensively and it also shows a decent growth rate. Finally CMI also has an excellent dividend rating. These ratings could make CMI a good candidate for dividend investing.
1. Profitability
1.1 Basic Checks
In the past year CMI was profitable.
CMI had a positive operating cash flow in the past year.
Each year in the past 5 years CMI has been profitable.
In the past 5 years CMI always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of CMI (7.93%) is better than 73.08% of its industry peers.
CMI has a Return On Equity of 22.12%. This is amongst the best in the industry. CMI outperforms 88.46% of its industry peers.
The Return On Invested Capital of CMI (10.92%) is better than 73.85% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CMI is in line with the industry average of 10.46%.
The 3 year average ROIC (10.13%) for CMI is below the current ROIC(10.92%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.93% | ||
| ROE | 22.12% | ||
| ROIC | 10.92% |
ROA(3y)7.3%
ROA(5y)7.76%
ROE(3y)23.56%
ROE(5y)23.61%
ROIC(3y)10.13%
ROIC(5y)9.3%
1.3 Margins
With a decent Profit Margin value of 7.94%, CMI is doing good in the industry, outperforming 64.62% of the companies in the same industry.
CMI's Profit Margin has improved in the last couple of years.
The Operating Margin of CMI (12.01%) is better than 60.77% of its industry peers.
CMI's Operating Margin has been stable in the last couple of years.
CMI has a Gross Margin of 25.94%. This is in the lower half of the industry: CMI underperforms 62.31% of its industry peers.
In the last couple of years the Gross Margin of CMI has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.01% | ||
| PM (TTM) | 7.94% | ||
| GM | 25.94% |
OM growth 3Y5.37%
OM growth 5Y0.23%
PM growth 3Y9.26%
PM growth 5Y3.83%
GM growth 3Y1.89%
GM growth 5Y-0.23%
2. Health
2.1 Basic Checks
CMI has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, CMI has less shares outstanding
Compared to 5 years ago, CMI has less shares outstanding
CMI has a worse debt/assets ratio than last year.
2.2 Solvency
CMI has an Altman-Z score of 4.59. This indicates that CMI is financially healthy and has little risk of bankruptcy at the moment.
CMI has a Altman-Z score of 4.59. This is in the better half of the industry: CMI outperforms 71.54% of its industry peers.
The Debt to FCF ratio of CMI is 3.34, which is a good value as it means it would take CMI, 3.34 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 3.34, CMI is doing good in the industry, outperforming 66.15% of the companies in the same industry.
CMI has a Debt/Equity ratio of 0.62. This is a neutral value indicating CMI is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.62, CMI is not doing good in the industry: 60.77% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 3.34 | ||
| Altman-Z | 4.59 |
ROIC/WACC1.17
WACC9.34%
2.3 Liquidity
A Current Ratio of 1.77 indicates that CMI should not have too much problems paying its short term obligations.
The Current ratio of CMI (1.77) is worse than 63.08% of its industry peers.
A Quick Ratio of 1.11 indicates that CMI should not have too much problems paying its short term obligations.
The Quick ratio of CMI (1.11) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.77 | ||
| Quick Ratio | 1.11 |
3. Growth
3.1 Past
CMI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 14.51%, which is quite good.
The Earnings Per Share has been growing slightly by 7.79% on average over the past years.
CMI shows a decrease in Revenue. In the last year, the revenue decreased by -1.80%.
The Revenue has been growing slightly by 7.67% on average over the past years.
EPS 1Y (TTM)14.51%
EPS 3Y13.63%
EPS 5Y7.79%
EPS Q2Q%-4.61%
Revenue 1Y (TTM)-1.8%
Revenue growth 3Y12.39%
Revenue growth 5Y7.67%
Sales Q2Q%-1.64%
3.2 Future
The Earnings Per Share is expected to grow by 15.06% on average over the next years. This is quite good.
CMI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.43% yearly.
EPS Next Y9.08%
EPS Next 2Y11.2%
EPS Next 3Y13.42%
EPS Next 5Y15.06%
Revenue Next Year-1.23%
Revenue Next 2Y2.05%
Revenue Next 3Y4.23%
Revenue Next 5Y5.43%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
CMI is valuated rather expensively with a Price/Earnings ratio of 21.86.
Compared to the rest of the industry, the Price/Earnings ratio of CMI indicates a somewhat cheap valuation: CMI is cheaper than 61.54% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 26.76. CMI is around the same levels.
Based on the Price/Forward Earnings ratio of 19.14, the valuation of CMI can be described as rather expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CMI is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of CMI to the average of the S&P500 Index (23.96), we can say CMI is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.86 | ||
| Fwd PE | 19.14 |
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 61.54% of the companies listed in the same industry.
CMI's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.63 | ||
| EV/EBITDA | 14.71 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates CMI does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of CMI may justify a higher PE ratio.
A more expensive valuation may be justified as CMI's earnings are expected to grow with 13.42% in the coming years.
PEG (NY)2.41
PEG (5Y)2.81
EPS Next 2Y11.2%
EPS Next 3Y13.42%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.57%, CMI has a reasonable but not impressive dividend return.
CMI's Dividend Yield is a higher than the industry average which is at 1.84.
CMI's Dividend Yield is slightly below the S&P500 average, which is at 2.31.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.57% |
5.2 History
On average, the dividend of CMI grows each year by 7.08%, 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)7.08%
Div Incr Years19
Div Non Decr Years20
5.3 Sustainability
CMI pays out 38.53% of its income as dividend. This is a sustainable payout ratio.
CMI's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP38.53%
EPS Next 2Y11.2%
EPS Next 3Y13.42%
NYSE:CMI (12/12/2025, 11:41:04 AM)
505.42
-17.99 (-3.44%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners87.13%
Inst Owner Change1.17%
Ins Owners0.3%
Ins Owner Change-0.92%
Market Cap69.77B
Revenue(TTM)33.58B
Net Income(TTM)2.67B
Analysts74.81
Price Target526.6 (4.19%)
Short Float %1.05%
Short Ratio1.55
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.57% |
Yearly Dividend6.94
Dividend Growth(5Y)7.08%
DP38.53%
Div Incr Years19
Div Non Decr Years20
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)19.52%
Min EPS beat(2)15.01%
Max EPS beat(2)24.03%
EPS beat(4)4
Avg EPS beat(4)17.02%
Min EPS beat(4)8.66%
Max EPS beat(4)24.03%
EPS beat(8)6
Avg EPS beat(8)10.42%
EPS beat(12)7
Avg EPS beat(12)7.35%
EPS beat(16)9
Avg EPS beat(16)3.53%
Revenue beat(2)2
Avg Revenue beat(2)2.37%
Min Revenue beat(2)1.44%
Max Revenue beat(2)3.3%
Revenue beat(4)3
Avg Revenue beat(4)1.79%
Min Revenue beat(4)-1.21%
Max Revenue beat(4)3.63%
Revenue beat(8)6
Avg Revenue beat(8)1.86%
Revenue beat(12)10
Avg Revenue beat(12)2.42%
Revenue beat(16)13
Avg Revenue beat(16)2.57%
PT rev (1m)18.8%
PT rev (3m)27.17%
EPS NQ rev (1m)3.99%
EPS NQ rev (3m)5.88%
EPS NY rev (1m)4.39%
EPS NY rev (3m)3.74%
Revenue NQ rev (1m)-0.46%
Revenue NQ rev (3m)0.16%
Revenue NY rev (1m)1.15%
Revenue NY rev (3m)1.1%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.86 | ||
| Fwd PE | 19.14 | ||
| P/S | 2.08 | ||
| P/FCF | 30.63 | ||
| P/OCF | 19.88 | ||
| P/B | 5.78 | ||
| P/tB | 9.31 | ||
| EV/EBITDA | 14.71 |
EPS(TTM)23.12
EY4.57%
EPS(NY)26.41
Fwd EY5.23%
FCF(TTM)16.5
FCFY3.27%
OCF(TTM)25.42
OCFY5.03%
SpS243.27
BVpS87.39
TBVpS54.31
PEG (NY)2.41
PEG (5Y)2.81
Graham Number213.22
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.93% | ||
| ROE | 22.12% | ||
| ROCE | 16.67% | ||
| ROIC | 10.92% | ||
| ROICexc | 12.51% | ||
| ROICexgc | 15.85% | ||
| OM | 12.01% | ||
| PM (TTM) | 7.94% | ||
| GM | 25.94% | ||
| FCFM | 6.78% |
ROA(3y)7.3%
ROA(5y)7.76%
ROE(3y)23.56%
ROE(5y)23.61%
ROIC(3y)10.13%
ROIC(5y)9.3%
ROICexc(3y)11.48%
ROICexc(5y)10.95%
ROICexgc(3y)15.52%
ROICexgc(5y)14.18%
ROCE(3y)16.61%
ROCE(5y)14.89%
ROICexgc growth 3Y9.39%
ROICexgc growth 5Y0.52%
ROICexc growth 3Y5.66%
ROICexc growth 5Y-1.01%
OM growth 3Y5.37%
OM growth 5Y0.23%
PM growth 3Y9.26%
PM growth 5Y3.83%
GM growth 3Y1.89%
GM growth 5Y-0.23%
F-Score6
Asset Turnover1
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 3.34 | ||
| Debt/EBITDA | 1.46 | ||
| Cap/Depr | 112.32% | ||
| Cap/Sales | 3.67% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 68.43% | ||
| Profit Quality | 85.38% | ||
| Current Ratio | 1.77 | ||
| Quick Ratio | 1.11 | ||
| Altman-Z | 4.59 |
F-Score6
WACC9.34%
ROIC/WACC1.17
Cap/Depr(3y)116.24%
Cap/Depr(5y)110.58%
Cap/Sales(3y)3.46%
Cap/Sales(5y)3.31%
Profit Quality(3y)143.42%
Profit Quality(5y)123.85%
High Growth Momentum
Growth
EPS 1Y (TTM)14.51%
EPS 3Y13.63%
EPS 5Y7.79%
EPS Q2Q%-4.61%
EPS Next Y9.08%
EPS Next 2Y11.2%
EPS Next 3Y13.42%
EPS Next 5Y15.06%
Revenue 1Y (TTM)-1.8%
Revenue growth 3Y12.39%
Revenue growth 5Y7.67%
Sales Q2Q%-1.64%
Revenue Next Year-1.23%
Revenue Next 2Y2.05%
Revenue Next 3Y4.23%
Revenue Next 5Y5.43%
EBIT growth 1Y17.83%
EBIT growth 3Y18.42%
EBIT growth 5Y7.91%
EBIT Next Year45.85%
EBIT Next 3Y20.97%
EBIT Next 5Y19.2%
FCF growth 1Y3.03%
FCF growth 3Y-42.53%
FCF growth 5Y-35.01%
OCF growth 1Y5.57%
OCF growth 3Y-12.97%
OCF growth 5Y-14.11%
CUMMINS INC / CMI FAQ
What is the ChartMill fundamental rating of CUMMINS INC (CMI) stock?
ChartMill assigns a fundamental rating of 5 / 10 to CMI.
Can you provide the valuation status for CUMMINS INC?
ChartMill assigns a valuation rating of 3 / 10 to CUMMINS INC (CMI). This can be considered as Overvalued.
How profitable is CUMMINS INC (CMI) stock?
CUMMINS INC (CMI) has a profitability rating of 7 / 10.
What is the earnings growth outlook for CUMMINS INC?
The Earnings per Share (EPS) of CUMMINS INC (CMI) is expected to grow by 9.08% in the next year.
How sustainable is the dividend of CUMMINS INC (CMI) stock?
The dividend rating of CUMMINS INC (CMI) is 7 / 10 and the dividend payout ratio is 38.53%.