CUMMINS INC (CMI)
US2310211063 - Common Stock
Taking everything into account, CMI scores 4 out of 10 in our fundamental rating. CMI was compared to 131 industry peers in the Machinery industry. There are concerns on the financial health of CMI while its profitability can be described as average. CMI has a valuation in line with the averages, but it does not seem to be growing.
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.
Each year in the past 5 years CMI has been profitable.
Each year in the past 5 years CMI had a positive operating cash flow.
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 65.35% 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 82.68% 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 67.72% of its industry peers.
CMI had an Average Return On Invested Capital over the past 3 years of 8.89%. This is below the industry average of 11.01%.
The 3 year average ROIC (8.89%) for CMI is below the current ROIC(9.81%), indicating increased profibility in the last year.
| 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
With a Profit Margin value of 6.13%, CMI perfoms like the industry average, outperforming 57.48% of the companies in the same industry.
In the last couple of years the Profit Margin of CMI has declined.
CMI has a Operating Margin (10.01%) which is comparable to the rest of the industry.
CMI's Operating Margin has been stable in the last couple of years.
The Gross Margin of CMI (24.58%) is worse than 61.42% 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 | 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
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 more shares outstanding
The number of shares outstanding for CMI has been reduced compared to 5 years ago.
CMI has a better debt/assets ratio than last year.
2.2 Solvency
CMI has an Altman-Z score of 3.86. This indicates that CMI is financially healthy and has little risk of bankruptcy at the moment.
CMI's Altman-Z score of 3.86 is fine compared to the rest of the industry. CMI outperforms 63.78% of its industry peers.
The Debt to FCF ratio of CMI is 22.51, which is on the high side as it means it would take CMI, 22.51 years of fcf income to pay off all of its debts.
CMI has a Debt to FCF ratio of 22.51. This is in the lower half of the industry: CMI underperforms 61.42% of its industry peers.
CMI has a Debt/Equity ratio of 0.67. This is a neutral value indicating CMI is somewhat dependend on debt financing.
CMI has a worse Debt to Equity ratio (0.67) than 70.08% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | 22.51 | ||
| Altman-Z | 3.86 |
ROIC/WACC1.11
WACC8.84%
2.3 Liquidity
CMI has a Current Ratio of 1.32. This is a normal value and indicates that CMI is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of CMI (1.32) is worse than 83.46% 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 worse Quick ratio (0.79) than 81.89% 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%.
Measured over the past 5 years, CMI shows a small growth in Earnings Per Share. The EPS has been growing by 6.29% on average per year.
The Revenue has been growing slightly by 2.72% in the past year.
The Revenue has been growing slightly by 7.46% on average over the past years.
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
CMI is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 2.39% yearly.
CMI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.28% yearly.
EPS Next Y10.32%
EPS Next 2Y7.85%
EPS Next 3Y10.44%
EPS Next 5Y2.39%
Revenue Next Year0.16%
Revenue Next 2Y1.57%
Revenue Next 3Y3.61%
Revenue Next 5Y2.28%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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
The Price/Earnings ratio is 18.27, which indicates a rather expensive current valuation of CMI.
CMI's Price/Earnings ratio is a bit cheaper when compared to the industry. CMI is cheaper than 71.65% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.96, CMI is valued a bit cheaper.
With a Price/Forward Earnings ratio of 16.55, CMI is valued correctly.
CMI's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. CMI is cheaper than 74.80% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.82, CMI is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.27 | ||
| Fwd PE | 16.55 |
4.2 Price Multiples
69.29% of the companies in the same industry are more expensive than CMI, based on the Enterprise Value to EBITDA ratio.
66.14% of the companies in the same industry are cheaper than CMI, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 150.06 | ||
| EV/EBITDA | 11.9 |
4.3 Compensation for Growth
CMI's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of CMI may justify a higher PE ratio.
PEG (NY)1.77
PEG (5Y)2.9
EPS Next 2Y7.85%
EPS Next 3Y10.44%
5. Dividend
5.1 Amount
CMI has a Yearly Dividend Yield of 2.00%. Purely for dividend investing, there may be better candidates out there.
CMI's Dividend Yield is rather good when compared to the industry average which is at 1.54. CMI pays more dividend than 88.98% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.23, CMI has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2% |
5.2 History
The dividend of CMI is nicely growing with an annual growth rate of 7.96%!
CMI has been paying a dividend for at least 10 years, so it has 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 Years18
Div Non Decr Years19
5.3 Sustainability
CMI pays out 45.64% of its income as dividend. 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 2Y7.85%
EPS Next 3Y10.44%
CUMMINS INC
NYSE:CMI (11/21/2024, 8:20:08 PM)
After market: 368.86 0 (0%)368.86
+7.91 (+2.19%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap50.57B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
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Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.27 | ||
| Fwd PE | 16.55 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.77
PEG (5Y)2.9
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.54% | ||
| ROE | 20.33% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 10.01% | ||
| PM (TTM) | 6.13% | ||
| GM | 24.58% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.07
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.32 | ||
| Quick Ratio | 0.79 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)2.91%
EPS 3Y16.69%
EPS 5Y
EPS Q2Q%
EPS Next Y10.32%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)2.72%
Revenue growth 3Y19.8%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y