CUMMINS INC (CMI) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:CMI - US2310211063 - Common Stock
499.48 USD
+1.5 (+0.3%)
CMI gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 130 industry peers in the Machinery industry. CMI has an excellent profitability rating, but 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. These ratings would make CMI suitable 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.
Each year in the past 5 years CMI has 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 75.38% of its industry peers.
CMI's Return On Equity of 22.12% is amongst the best of the industry. CMI outperforms 88.46% of its industry peers.
Looking at the Return On Invested Capital, with a value of 10.92%, CMI is in the better half of the industry, outperforming 76.15% of the companies in the same industry.
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 10.35%.
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 Profit Margin of 7.94%. This is in the better half of the industry: CMI outperforms 65.38% of its industry peers.
In the last couple of years the Profit Margin of CMI has grown nicely.
Looking at the Operating Margin, with a value of 12.01%, CMI is in the better half of the industry, outperforming 61.54% of the companies in the same industry.
CMI's Operating Margin has been stable in the last couple of years.
The Gross Margin of CMI (25.94%) is worse 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 | 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.
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 4.49 indicates that CMI is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 4.49, CMI is doing good in the industry, outperforming 70.77% 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 better Debt to FCF ratio (3.34) than 67.69% 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 of 0.62. This is in the lower half of the industry: CMI underperforms 60.77% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 3.34 | ||
| Altman-Z | 4.49 |
ROIC/WACC1.2
WACC9.11%
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.
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.
The Quick ratio of CMI (1.11) 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
The Earnings Per Share has grown by an nice 14.51% over the past year.
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.
The Revenue has decreased by -1.80% in the past year.
The Revenue has been growing slightly by 7.67% on average over the past years.
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
CMI is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 15.06% yearly.
CMI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.43% yearly.
EPS Next Y4.49%
EPS Next 2Y8.38%
EPS Next 3Y11.56%
EPS Next 5Y15.06%
Revenue Next Year-2.35%
Revenue Next 2Y0.85%
Revenue Next 3Y3.41%
Revenue Next 5Y5.43%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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 21.60, which indicates a rather expensive current valuation of CMI.
Based on the Price/Earnings ratio, CMI is valued a bit cheaper than the industry average as 63.08% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 26.31. CMI is around the same levels.
A Price/Forward Earnings ratio of 19.91 indicates a rather expensive valuation of CMI.
CMI's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.56, CMI is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.6 | ||
| Fwd PE | 19.91 |
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 is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.27 | ||
| EV/EBITDA | 14.03 |
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.
CMI has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)4.81
PEG (5Y)2.77
EPS Next 2Y8.38%
EPS Next 3Y11.56%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.61%, CMI has a reasonable but not impressive dividend return.
CMI's Dividend Yield is a higher than the industry average which is at 1.90.
CMI's Dividend Yield is slightly below the S&P500 average, which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.61% |
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 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
CMI pays out 38.53% of its income as dividend. This is a sustainable payout ratio.
The dividend of CMI is growing, but earnings are growing more, so the dividend growth is sustainable.
DP38.53%
EPS Next 2Y8.38%
EPS Next 3Y11.56%
NYSE:CMI (12/1/2025, 11:15:02 AM)
499.48
+1.5 (+0.3%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners87.11%
Inst Owner Change1.13%
Ins Owners0.31%
Ins Owner Change-0.92%
Market Cap68.95B
Revenue(TTM)33.58B
Net Income(TTM)2.67B
Analysts72.59
Price Target493.95 (-1.11%)
Short Float %1.18%
Short Ratio1.78
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.61% |
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)17.41%
PT rev (3m)19.28%
EPS NQ rev (1m)8.64%
EPS NQ rev (3m)6.25%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.62%
Revenue NQ rev (1m)0.47%
Revenue NQ rev (3m)0.2%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)-0.05%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.6 | ||
| Fwd PE | 19.91 | ||
| P/S | 2.05 | ||
| P/FCF | 30.27 | ||
| P/OCF | 19.65 | ||
| P/B | 5.72 | ||
| P/tB | 9.2 | ||
| EV/EBITDA | 14.03 |
EPS(TTM)23.12
EY4.63%
EPS(NY)25.09
Fwd EY5.02%
FCF(TTM)16.5
FCFY3.3%
OCF(TTM)25.42
OCFY5.09%
SpS243.27
BVpS87.39
TBVpS54.31
PEG (NY)4.81
PEG (5Y)2.77
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 | 4.49 |
F-Score6
WACC9.11%
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)14.51%
EPS 3Y13.63%
EPS 5Y7.79%
EPS Q2Q%-4.61%
EPS Next Y4.49%
EPS Next 2Y8.38%
EPS Next 3Y11.56%
EPS Next 5Y15.06%
Revenue 1Y (TTM)-1.8%
Revenue growth 3Y12.39%
Revenue growth 5Y7.67%
Sales Q2Q%-1.64%
Revenue Next Year-2.35%
Revenue Next 2Y0.85%
Revenue Next 3Y3.41%
Revenue Next 5Y5.43%
EBIT growth 1Y17.83%
EBIT growth 3Y18.42%
EBIT growth 5Y7.91%
EBIT Next Year43.48%
EBIT Next 3Y20.19%
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 4.49% 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%.