CUMMINS INC (CMI) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:CMI - US2310211063 - Common Stock
504.68 USD
-3.02 (-0.59%)
Overall CMI gets a fundamental rating of 5 out of 10. We evaluated CMI against 130 industry peers in the Machinery industry. CMI scores excellent on profitability, but there are some minor concerns on its financial health. CMI is quite expensive at the moment. It does show a decent growth rate. Finally CMI also has an excellent dividend rating. These ratings could make CMI a good candidate for dividend investing.
1. Profitability
1.1 Basic Checks
CMI had positive earnings in the past year.
CMI had a positive operating cash flow in the past year.
Each year in the past 5 years CMI has been profitable.
Each year in the past 5 years CMI had a positive operating cash flow.
1.2 Ratios
The Return On Assets of CMI (7.93%) is better than 73.85% of its industry peers.
Looking at the Return On Equity, with a value of 22.12%, CMI belongs to the top of the industry, outperforming 88.46% of the companies in the same industry.
CMI's Return On Invested Capital of 10.92% is fine compared to the rest of the industry. CMI outperforms 74.62% 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 10.46%.
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's Profit Margin of 7.94% is fine compared to the rest of the industry. CMI outperforms 64.62% of its industry peers.
In the last couple of years the Profit Margin of CMI has grown nicely.
CMI has a better Operating Margin (12.01%) than 60.77% of its industry peers.
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.
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.
Compared to 1 year ago, CMI has less shares outstanding
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 4.53 indicates that CMI is not in any danger for bankruptcy at the moment.
CMI has a better Altman-Z score (4.53) than 70.77% of its industry peers.
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 has a better Debt to FCF ratio (3.34) than 66.92% of its industry peers.
A Debt/Equity ratio of 0.62 indicates that CMI is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.62, CMI is doing worse than 60.77% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 3.34 | ||
| Altman-Z | 4.53 |
ROIC/WACC1.17
WACC9.33%
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 worse Current ratio (1.77) than 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.
Looking at the last year, CMI shows a decrease in Revenue. The Revenue has decreased by -1.80% in the last year.
CMI shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.67% yearly.
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.
The Revenue is expected to grow by 5.43% on average over the next years.
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
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 21.83, which indicates a rather expensive current valuation of CMI.
Based on the Price/Earnings ratio, CMI is valued a bit cheaper than 62.31% of the companies in the same industry.
CMI's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.34.
With a Price/Forward Earnings ratio of 19.11, 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 at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 23.56, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.83 | ||
| Fwd PE | 19.11 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CMI is valued a bit cheaper than the industry average as 60.77% of the companies are valued more expensively.
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 | 30.58 | ||
| EV/EBITDA | 14.29 |
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.
CMI's earnings are expected to grow with 13.42% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.4
PEG (5Y)2.8
EPS Next 2Y11.2%
EPS Next 3Y13.42%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.57%, CMI has a reasonable but not impressive dividend return.
CMI's Dividend Yield is a higher than the industry average which is at 1.84.
Compared to the average S&P500 Dividend Yield of 2.31, CMI is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.57% |
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%
NYSE:CMI (12/9/2025, 11:56:59 AM)
504.68
-3.02 (-0.59%)
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 Cap69.67B
Revenue(TTM)33.58B
Net Income(TTM)2.67B
Analysts74.81
Price Target526.6 (4.34%)
Short Float %1.05%
Short Ratio1.55
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.57% |
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)5.88%
EPS NY rev (1m)4.39%
EPS NY rev (3m)3.74%
Revenue NQ rev (1m)-0.46%
Revenue NQ rev (3m)0.16%
Revenue NY rev (1m)1.15%
Revenue NY rev (3m)1.1%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.83 | ||
| Fwd PE | 19.11 | ||
| P/S | 2.07 | ||
| P/FCF | 30.58 | ||
| P/OCF | 19.85 | ||
| P/B | 5.77 | ||
| P/tB | 9.29 | ||
| EV/EBITDA | 14.29 |
EPS(TTM)23.12
EY4.58%
EPS(NY)26.41
Fwd EY5.23%
FCF(TTM)16.5
FCFY3.27%
OCF(TTM)25.42
OCFY5.04%
SpS243.27
BVpS87.39
TBVpS54.31
PEG (NY)2.4
PEG (5Y)2.8
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 | 4.53 |
F-Score6
WACC9.33%
ROIC/WACC1.17
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%.