CUMMINS INC (CMI) Stock Fundamental Analysis
USA - NYSE:CMI - US2310211063 - Common Stock
417.97 USD
+3.96 (+0.96%)
417.97 USD
0 (0%)
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 belongs to the best of the industry regarding profitability, 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.
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.
In the past 5 years CMI has always been profitable.
In the past 5 years CMI always reported a positive cash flow from operatings.
1.2 Ratios
CMI has a better Return On Assets (8.58%) than 73.85% of its industry peers.
The Return On Equity of CMI (24.95%) is better than 91.54% of its industry peers.
CMI's Return On Invested Capital of 11.02% is fine compared to the rest of the industry. CMI outperforms 77.69% 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 10.01%.
The 3 year average ROIC (10.13%) for CMI is below the current ROIC(11.02%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.58% | ||
| ROE | 24.95% | ||
| ROIC | 11.02% |
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
CMI has a Profit Margin of 8.72%. This is in the better half of the industry: CMI outperforms 66.92% of its industry peers.
CMI's Profit Margin has improved in the last couple of years.
The Operating Margin of CMI (11.96%) is better than 62.31% of its industry peers.
CMI's Operating Margin has been stable in the last couple of years.
CMI has a worse Gross Margin (25.96%) than 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 | 11.96% | ||
| PM (TTM) | 8.72% | ||
| GM | 25.96% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), CMI is creating some value.
CMI has less shares outstanding than it did 1 year ago.
CMI has less shares outstanding than it did 5 years ago.
CMI has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 4.04 indicates that CMI is not in any danger for bankruptcy at the moment.
CMI's Altman-Z score of 4.04 is fine compared to the rest of the industry. CMI outperforms 66.92% of its industry peers.
The Debt to FCF ratio of CMI is 4.91, which is a neutral value as it means it would take CMI, 4.91 years of fcf income to pay off all of its debts.
CMI has a Debt to FCF ratio (4.91) which is in line with its industry peers.
CMI has a Debt/Equity ratio of 0.64. This is a neutral value indicating CMI is somewhat dependend on debt financing.
CMI has a worse Debt to Equity ratio (0.64) than 62.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 4.91 | ||
| Altman-Z | 4.04 |
ROIC/WACC1.2
WACC9.15%
2.3 Liquidity
A Current Ratio of 1.64 indicates that CMI should not have too much problems paying its short term obligations.
CMI has a worse Current ratio (1.64) than 66.15% of its industry peers.
CMI has a Quick Ratio of 1.03. This is a normal value and indicates that CMI is financially healthy and should not expect problems in meeting its short term obligations.
With a Quick ratio value of 1.03, CMI is not doing good in the industry: 61.54% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.64 | ||
| Quick Ratio | 1.03 |
3. Growth
3.1 Past
CMI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 23.63%, which is quite impressive.
CMI shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.79% yearly.
CMI shows a decrease in Revenue. In the last year, the revenue decreased by -1.33%.
The Revenue has been growing slightly by 7.67% on average over the past years.
EPS 1Y (TTM)23.63%
EPS 3Y13.63%
EPS 5Y7.79%
EPS Q2Q%22.24%
Revenue 1Y (TTM)-1.33%
Revenue growth 3Y12.39%
Revenue growth 5Y7.67%
Sales Q2Q%-1.74%
3.2 Future
The Earnings Per Share is expected to grow by 13.18% on average over the next years. This is quite good.
The Revenue is expected to grow by 6.35% on average over the next years.
EPS Next Y5.1%
EPS Next 2Y9.45%
EPS Next 3Y11.84%
EPS Next 5Y13.18%
Revenue Next Year-2.34%
Revenue Next 2Y1.74%
Revenue Next 3Y3.66%
Revenue Next 5Y6.35%
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 accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 17.87, CMI is valued on the expensive side.
Based on the Price/Earnings ratio, CMI is valued a bit cheaper than the industry average as 73.08% of the companies are valued more expensively.
CMI is valuated rather cheaply when we compare the Price/Earnings ratio to 27.77, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 16.33, CMI is valued correctly.
CMI's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. CMI is cheaper than 66.15% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of CMI to the average of the S&P500 Index (23.23), we can say CMI is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.87 | ||
| Fwd PE | 16.33 |
4.2 Price Multiples
CMI's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. CMI is cheaper than 66.15% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CMI is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.86 | ||
| EV/EBITDA | 11.95 |
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.
PEG (NY)3.51
PEG (5Y)2.29
EPS Next 2Y9.45%
EPS Next 3Y11.84%
5. Dividend
5.1 Amount
CMI has a Yearly Dividend Yield of 1.89%. 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 1.80. CMI pays more dividend than 83.08% of the companies in the same industry.
CMI's Dividend Yield is comparable with the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.89% |
5.2 History
The dividend of CMI is nicely growing with an annual growth rate of 7.08%!
CMI has been paying a dividend for at least 10 years, so it has 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.
Dividend Growth(5Y)7.08%
Div Incr Years19
Div Non Decr Years20
5.3 Sustainability
34.07% of the earnings are spent on dividend by CMI. This is a low number and sustainable payout ratio.
The dividend of CMI is growing, but earnings are growing more, so the dividend growth is sustainable.
DP34.07%
EPS Next 2Y9.45%
EPS Next 3Y11.84%
417.97
+3.96 (+0.96%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners87.11%
Inst Owner Change0.02%
Ins Owners0.31%
Ins Owner Change0.17%
Market Cap57.59B
Analysts72.59
Price Target420.7 (0.65%)
Short Float %1.19%
Short Ratio1.83
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.89% |
Yearly Dividend6.94
Dividend Growth(5Y)7.08%
DP34.07%
Div Incr Years19
Div Non Decr Years20
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)22.2%
Min EPS beat(2)20.37%
Max EPS beat(2)24.03%
EPS beat(4)4
Avg EPS beat(4)18.47%
Min EPS beat(4)8.66%
Max EPS beat(4)24.03%
EPS beat(8)5
Avg EPS beat(8)8.17%
EPS beat(12)6
Avg EPS beat(12)2.56%
EPS beat(16)8
Avg EPS beat(16)2.18%
Revenue beat(2)1
Avg Revenue beat(2)0.12%
Min Revenue beat(2)-1.21%
Max Revenue beat(2)1.44%
Revenue beat(4)3
Avg Revenue beat(4)1.2%
Min Revenue beat(4)-1.21%
Max Revenue beat(4)3.63%
Revenue beat(8)6
Avg Revenue beat(8)1.69%
Revenue beat(12)10
Avg Revenue beat(12)2.7%
Revenue beat(16)13
Avg Revenue beat(16)2.41%
PT rev (1m)1.59%
PT rev (3m)12.81%
EPS NQ rev (1m)-0.11%
EPS NQ rev (3m)-3.92%
EPS NY rev (1m)-0.04%
EPS NY rev (3m)6.87%
Revenue NQ rev (1m)0.02%
Revenue NQ rev (3m)-3.21%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)-0.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.87 | ||
| Fwd PE | 16.33 | ||
| P/S | 1.71 | ||
| P/FCF | 34.86 | ||
| P/OCF | 20.25 | ||
| P/B | 4.89 | ||
| P/tB | 8.27 | ||
| EV/EBITDA | 11.95 |
EPS(TTM)23.39
EY5.6%
EPS(NY)25.59
Fwd EY6.12%
FCF(TTM)11.99
FCFY2.87%
OCF(TTM)20.64
OCFY4.94%
SpS244.72
BVpS85.56
TBVpS50.52
PEG (NY)3.51
PEG (5Y)2.29
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.58% | ||
| ROE | 24.95% | ||
| ROCE | 16.84% | ||
| ROIC | 11.02% | ||
| ROICexc | 12.59% | ||
| ROICexgc | 16.23% | ||
| OM | 11.96% | ||
| PM (TTM) | 8.72% | ||
| GM | 25.96% | ||
| FCFM | 4.9% |
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%
ROICexcg growth 3Y9.39%
ROICexcg 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-Score5
Asset Turnover0.98
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 4.91 | ||
| Debt/EBITDA | 1.46 | ||
| Cap/Depr | 109.86% | ||
| Cap/Sales | 3.53% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 55.57% | ||
| Profit Quality | 56.17% | ||
| Current Ratio | 1.64 | ||
| Quick Ratio | 1.03 | ||
| Altman-Z | 4.04 |
F-Score5
WACC9.15%
ROIC/WACC1.2
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)23.63%
EPS 3Y13.63%
EPS 5Y7.79%
EPS Q2Q%22.24%
EPS Next Y5.1%
EPS Next 2Y9.45%
EPS Next 3Y11.84%
EPS Next 5Y13.18%
Revenue 1Y (TTM)-1.33%
Revenue growth 3Y12.39%
Revenue growth 5Y7.67%
Sales Q2Q%-1.74%
Revenue Next Year-2.34%
Revenue Next 2Y1.74%
Revenue Next 3Y3.66%
Revenue Next 5Y6.35%
EBIT growth 1Y22.51%
EBIT growth 3Y18.42%
EBIT growth 5Y7.91%
EBIT Next Year43.48%
EBIT Next 3Y20.19%
EBIT Next 5Y16.76%
FCF growth 1Y47.24%
FCF growth 3Y-42.53%
FCF growth 5Y-35.01%
OCF growth 1Y30.64%
OCF growth 3Y-12.97%
OCF growth 5Y-14.11%