CUMMINS INC (CMI) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:CMI - US2310211063 - Common Stock
552.09 USD
+7.6 (+1.4%)
551 USD
-1.09 (-0.2%)
We assign a fundamental rating of 5 out of 10 to CMI. CMI was compared to 132 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 quite expensive at the moment. It does show a decent growth rate. CMI also has an excellent dividend rating. With these ratings, CMI could be worth investigating further for dividend investing!.
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 Return On Assets of 7.93%. This is in the better half of the industry: CMI outperforms 74.24% of its industry peers.
CMI has a Return On Equity of 22.12%. This is amongst the best in the industry. CMI outperforms 90.15% of its industry peers.
With a decent Return On Invested Capital value of 10.92%, CMI is doing good in the industry, outperforming 75.76% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for CMI is in line with the industry average of 10.25%.
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
CMI has a better Profit Margin (7.94%) than 65.91% of its industry peers.
In the last couple of years the Profit Margin of CMI has grown nicely.
CMI's Operating Margin of 12.01% is fine compared to the rest of the industry. CMI outperforms 61.36% of its industry peers.
In the last couple of years the Operating Margin of CMI has remained more or less at the same level.
Looking at the Gross Margin, with a value of 25.94%, CMI is doing worse than 62.12% 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 | 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.
The number of shares outstanding for CMI has been reduced compared to 1 year ago.
The number of shares outstanding for CMI has been reduced compared to 5 years ago.
Compared to 1 year ago, CMI has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 4.70 indicates that CMI is not in any danger for bankruptcy at the moment.
CMI's Altman-Z score of 4.70 is fine compared to the rest of the industry. CMI outperforms 71.21% of its industry peers.
CMI has a debt to FCF ratio of 3.34. This is a good value and a sign of high solvency as CMI would need 3.34 years to pay back of all of its debts.
The Debt to FCF ratio of CMI (3.34) is better than 65.91% of its industry peers.
CMI has a Debt/Equity ratio of 0.62. This is a neutral value indicating CMI is somewhat dependend on debt financing.
CMI has a Debt to Equity ratio (0.62) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 3.34 | ||
| Altman-Z | 4.7 |
ROIC/WACC1.18
WACC9.26%
2.3 Liquidity
A Current Ratio of 1.77 indicates that CMI should not have too much problems paying its short term obligations.
CMI has a Current ratio of 1.77. This is in the lower half of the industry: CMI underperforms 61.36% of its industry peers.
CMI has a Quick Ratio of 1.11. This is a normal value and indicates that CMI is financially healthy and should not expect problems in meeting its short term obligations.
CMI has a Quick ratio (1.11) which 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.
Measured over the past 5 years, CMI shows a small growth in Earnings Per Share. The EPS has been growing by 7.79% on average per year.
Looking at the last year, CMI shows a decrease in Revenue. The Revenue has decreased by -1.80% in the last year.
Measured over the past years, CMI shows a small growth in Revenue. The Revenue has been growing by 7.67% on average per year.
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
Based on estimates for the next years, CMI will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.75% on average per year.
The Revenue is expected to grow by 5.43% on average over the next years.
EPS Next Y9.11%
EPS Next 2Y11.26%
EPS Next 3Y13.49%
EPS Next 5Y15.75%
Revenue Next Year-1.22%
Revenue Next 2Y2.05%
Revenue Next 3Y4.21%
Revenue Next 5Y5.43%
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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
CMI is valuated rather expensively with a Price/Earnings ratio of 23.88.
Based on the Price/Earnings ratio, CMI is valued a bit cheaper than the industry average as 60.61% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.19. CMI is around the same levels.
The Price/Forward Earnings ratio is 20.88, which indicates a rather expensive current valuation of CMI.
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 (23.92), we can say CMI is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.88 | ||
| Fwd PE | 20.88 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as CMI.
CMI's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.45 | ||
| EV/EBITDA | 15.48 |
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.
CMI's earnings are expected to grow with 13.49% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.62
PEG (5Y)3.07
EPS Next 2Y11.26%
EPS Next 3Y13.49%
5. Dividend
5.1 Amount
CMI has a Yearly Dividend Yield of 1.47%.
CMI's Dividend Yield is rather good when compared to the industry average which is at 0.80. CMI pays more dividend than 80.30% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 1.92, CMI is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.47% |
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
38.53% 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.
DP38.53%
EPS Next 2Y11.26%
EPS Next 3Y13.49%
552.09
+7.6 (+1.4%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners87.23%
Inst Owner Change0.37%
Ins Owners0.3%
Ins Owner Change-0.92%
Market Cap76.21B
Revenue(TTM)33.58B
Net Income(TTM)2.67B
Analysts76.3
Price Target541.33 (-1.95%)
Short Float %1.13%
Short Ratio1.64
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.47% |
Yearly Dividend6.94
Dividend Growth(5Y)7.08%
DP38.53%
Div Incr Years19
Div Non Decr Years20
Ex-DateN/A
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)2.8%
PT rev (3m)28.68%
EPS NQ rev (1m)0.71%
EPS NQ rev (3m)6.9%
EPS NY rev (1m)0.03%
EPS NY rev (3m)3.82%
Revenue NQ rev (1m)0.05%
Revenue NQ rev (3m)0.17%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)1.15%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.88 | ||
| Fwd PE | 20.88 | ||
| P/S | 2.27 | ||
| P/FCF | 33.45 | ||
| P/OCF | 21.72 | ||
| P/B | 6.32 | ||
| P/tB | 10.17 | ||
| EV/EBITDA | 15.48 |
EPS(TTM)23.12
EY4.19%
EPS(NY)26.44
Fwd EY4.79%
FCF(TTM)16.5
FCFY2.99%
OCF(TTM)25.42
OCFY4.6%
SpS243.27
BVpS87.39
TBVpS54.31
PEG (NY)2.62
PEG (5Y)3.07
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 | 4.7 |
F-Score6
WACC9.26%
ROIC/WACC1.18
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 Y9.11%
EPS Next 2Y11.26%
EPS Next 3Y13.49%
EPS Next 5Y15.75%
Revenue 1Y (TTM)-1.8%
Revenue growth 3Y12.39%
Revenue growth 5Y7.67%
Sales Q2Q%-1.64%
Revenue Next Year-1.22%
Revenue Next 2Y2.05%
Revenue Next 3Y4.21%
Revenue Next 5Y5.43%
EBIT growth 1Y17.83%
EBIT growth 3Y18.42%
EBIT growth 5Y7.91%
EBIT Next Year45.97%
EBIT Next 3Y21.43%
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.
What is the valuation status of CUMMINS INC (CMI) stock?
ChartMill assigns a valuation rating of 3 / 10 to CUMMINS INC (CMI). This can be considered as Overvalued.
What is the profitability of CMI stock?
CUMMINS INC (CMI) has a profitability rating of 7 / 10.
What are the PE and PB ratios of CUMMINS INC (CMI) stock?
The Price/Earnings (PE) ratio for CUMMINS INC (CMI) is 23.88 and the Price/Book (PB) ratio is 6.32.
Can you provide the dividend sustainability for CMI stock?
The dividend rating of CUMMINS INC (CMI) is 7 / 10 and the dividend payout ratio is 38.53%.