CUMMINS INC (CMI) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:CMI - US2310211063 - Common Stock
578.94 USD
+4.1 (+0.71%)
514.1 USD
-64.84 (-11.2%)
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 has a great profitability rating, 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
- In the past year CMI was profitable.
- CMI had a positive operating cash flow in the past year.
- In the past 5 years CMI has always 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 7.93%, CMI is in the better half of the industry, outperforming 74.24% of the companies in the same industry.
- The Return On Equity of CMI (22.12%) is better than 90.15% of its industry peers.
- CMI has a Return On Invested Capital of 10.92%. This is in the better half of the industry: CMI outperforms 75.76% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for CMI is in line with the industry average of 10.24%.
- The last Return On Invested Capital (10.92%) for CMI is above the 3 year average (10.13%), which is a sign of increasing profitability.
| 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.
- CMI's Profit Margin has improved in the last couple of years.
- 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.
- CMI's Gross Margin of 25.94% is on the low side compared to the rest of the industry. CMI is outperformed by 62.12% of its industry peers.
- 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
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), CMI is creating some value.
- The number of shares outstanding for CMI has been reduced compared to 1 year ago.
- CMI has less shares outstanding than it did 5 years ago.
- The debt/assets ratio for CMI is higher compared to a year ago.
2.2 Solvency
- An Altman-Z score of 4.80 indicates that CMI is not in any danger for bankruptcy at the moment.
- With a decent Altman-Z score value of 4.80, CMI is doing good in the industry, outperforming 71.21% of the companies in the same industry.
- 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.
- CMI's Debt to FCF ratio of 3.34 is fine compared to the rest of the industry. CMI outperforms 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 | 4.8 |
ROIC/WACC1.14
WACC9.55%
2.3 Liquidity
- CMI has a Current Ratio of 1.77. 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 Current ratio value of 1.77, CMI is not doing good in the industry: 61.36% of the companies in the same industry are doing better.
- 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.
- Looking at the Quick ratio, with a value of 1.11, CMI is in line with its industry, outperforming 43.18% of the companies in the same 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.
- 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.
- Based on estimates for the next years, CMI will show a small growth in Revenue. The Revenue will grow by 5.43% on average per year.
EPS Next Y9.11%
EPS Next 2Y11.26%
EPS Next 3Y13.49%
EPS Next 5Y15.75%
Revenue Next Year-1.24%
Revenue Next 2Y2.15%
Revenue Next 3Y4.3%
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
- Based on the Price/Earnings ratio of 25.04, the valuation of CMI can be described as expensive.
- The rest of the industry has a similar Price/Earnings ratio as CMI.
- CMI is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.38, which is the current average of the S&P500 Index.
- The Price/Forward Earnings ratio is 21.89, which indicates a rather expensive current valuation of CMI.
- CMI's Price/Forward Earnings is on the same level as the industry average.
- CMI is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 24.29, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.04 | ||
| Fwd PE | 21.89 |
4.2 Price Multiples
- CMI's Enterprise Value to EBITDA is on the same level as the industry average.
- 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 | 35.08 | ||
| EV/EBITDA | 16.21 |
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 13.49% in the coming years.
PEG (NY)2.75
PEG (5Y)3.21
EPS Next 2Y11.26%
EPS Next 3Y13.49%
5. Dividend
5.1 Amount
- CMI has a Yearly Dividend Yield of 1.39%. Purely for dividend investing, there may be better candidates out there.
- CMI's Dividend Yield is a higher than the industry average which is at 0.98.
- Compared to the average S&P500 Dividend Yield of 1.85, CMI is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.39% |
5.2 History
- On average, the dividend of CMI grows each year by 7.08%, which is quite nice.
- 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)7.08%
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%
578.94
+4.1 (+0.71%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)11-06 2025-11-06/bmo
Earnings (Next)02-05 2026-02-05/amc
Inst Owners87.23%
Inst Owner Change0.36%
Ins Owners0.3%
Ins Owner Change-0.97%
Market Cap79.92B
Revenue(TTM)33.58B
Net Income(TTM)2.67B
Analysts76.3
Price Target548.54 (-5.25%)
Short Float %1.13%
Short Ratio1.64
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.39% |
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)4.17%
PT rev (3m)30.39%
EPS NQ rev (1m)-0.17%
EPS NQ rev (3m)6.73%
EPS NY rev (1m)0.03%
EPS NY rev (3m)3.82%
Revenue NQ rev (1m)0.02%
Revenue NQ rev (3m)0.1%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)1.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.04 | ||
| Fwd PE | 21.89 | ||
| P/S | 2.38 | ||
| P/FCF | 35.08 | ||
| P/OCF | 22.77 | ||
| P/B | 6.62 | ||
| P/tB | 10.66 | ||
| EV/EBITDA | 16.21 |
EPS(TTM)23.12
EY3.99%
EPS(NY)26.44
Fwd EY4.57%
FCF(TTM)16.5
FCFY2.85%
OCF(TTM)25.42
OCFY4.39%
SpS243.27
BVpS87.39
TBVpS54.31
PEG (NY)2.75
PEG (5Y)3.21
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 | 4.8 |
F-Score6
WACC9.55%
ROIC/WACC1.14
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-1.24%
Revenue Next 2Y2.15%
Revenue Next 3Y4.3%
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 25.04 and the Price/Book (PB) ratio is 6.62.
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%.