CUMMINS INC (CMI) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:CMI - US2310211063 - Common Stock
497.44 USD
-17.09 (-3.32%)
497.44 USD
0 (0%)
Overall CMI gets a fundamental rating of 5 out of 10. We evaluated CMI 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 quite expensive at the moment. It does show a decent growth rate. CMI also has an excellent dividend rating. This makes CMI very considerable 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.
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.
The Return On Equity of CMI (22.12%) is better than 88.46% of its industry peers.
The Return On Invested Capital of CMI (10.92%) is better than 74.62% of its industry peers.
CMI had an Average Return On Invested Capital over the past 3 years of 10.13%. This is in line with the industry average of 10.32%.
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
Looking at the Profit Margin, with a value of 7.94%, CMI is in the better half of the industry, outperforming 65.38% of the companies in the same industry.
CMI's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 12.01%, CMI is doing good in the industry, outperforming 61.54% of the companies in the same industry.
In the last couple of years the Operating Margin of CMI has remained more or less at the same level.
CMI has a worse Gross Margin (25.94%) than 62.31% 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so CMI is still creating some value.
CMI has less shares outstanding than it did 1 year ago.
The number of shares outstanding for CMI has been reduced compared to 5 years ago.
CMI has a worse debt/assets ratio than last year.
2.2 Solvency
CMI has an Altman-Z score of 4.56. This indicates that CMI is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 4.56, CMI is doing good in the industry, outperforming 72.31% of the companies in the same industry.
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.
CMI has a Debt to FCF ratio of 3.34. This is in the better half of the industry: CMI outperforms 66.15% 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 worse Debt to Equity ratio (0.62) than 60.77% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 3.34 | ||
| Altman-Z | 4.56 |
ROIC/WACC1.16
WACC9.38%
2.3 Liquidity
A Current Ratio of 1.77 indicates that CMI should not have too much problems paying its short term obligations.
CMI's Current ratio of 1.77 is on the low side compared to the rest of the industry. CMI is outperformed by 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.
CMI's Quick ratio of 1.11 is in line compared to the rest of the industry. CMI outperforms 42.31% of its industry peers.
| 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.
The Revenue has decreased by -1.80% in the past 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 15.06% 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 Y9.08%
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
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.
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
A Price/Earnings ratio of 21.52 indicates a rather expensive valuation of CMI.
Compared to the rest of the industry, the Price/Earnings ratio of CMI indicates a somewhat cheap valuation: CMI is cheaper than 60.77% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of CMI to the average of the S&P500 Index (26.22), we can say CMI is valued inline with the index average.
With a Price/Forward Earnings ratio of 18.83, CMI is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CMI is on the same level as its industry peers.
CMI is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 23.58, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.52 | ||
| Fwd PE | 18.83 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CMI is on the same level as its industry peers.
CMI's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.14 | ||
| EV/EBITDA | 14.47 |
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 13.42% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.37
PEG (5Y)2.76
EPS Next 2Y11.2%
EPS Next 3Y13.42%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.53%, CMI has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.00, CMI pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 1.87, CMI has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.53% |
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
38.53% of the earnings are spent on dividend by CMI. This is a low number and 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%
497.44
-17.09 (-3.32%)
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 Cap68.67B
Revenue(TTM)33.58B
Net Income(TTM)2.67B
Analysts74.81
Price Target526.6 (5.86%)
Short Float %1.4%
Short Ratio2.05
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.53% |
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)5.87%
EPS NY rev (1m)4.39%
EPS NY rev (3m)3.74%
Revenue NQ rev (1m)-0.46%
Revenue NQ rev (3m)0.2%
Revenue NY rev (1m)1.15%
Revenue NY rev (3m)1.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.52 | ||
| Fwd PE | 18.83 | ||
| P/S | 2.04 | ||
| P/FCF | 30.14 | ||
| P/OCF | 19.57 | ||
| P/B | 5.69 | ||
| P/tB | 9.16 | ||
| EV/EBITDA | 14.47 |
EPS(TTM)23.12
EY4.65%
EPS(NY)26.41
Fwd EY5.31%
FCF(TTM)16.5
FCFY3.32%
OCF(TTM)25.42
OCFY5.11%
SpS243.27
BVpS87.39
TBVpS54.31
PEG (NY)2.37
PEG (5Y)2.76
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 | 4.56 |
F-Score6
WACC9.38%
ROIC/WACC1.16
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%.