CUMMINS INC (CMI) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:CMI - US2310211063 - Common Stock
514.64 USD
-4.48 (-0.86%)
514.75 USD
+0.11 (+0.02%)
CMI gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 132 industry peers in the Machinery industry. CMI scores excellent on profitability, but there are some minor concerns on its financial health. CMI is valied quite expensively at the moment, while it does show a decent growth rate. Finally 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.
In the past year CMI had a positive cash flow from operations.
CMI had positive earnings in each of the past 5 years.
CMI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
CMI has a Return On Assets of 7.93%. This is in the better half of the industry: CMI outperforms 73.48% of its industry peers.
CMI has a Return On Equity of 22.12%. This is amongst the best in the industry. CMI outperforms 89.39% 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 75.00% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for CMI is in line with the industry average of 10.27%.
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 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 62.12% 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.
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.
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.
The debt/assets ratio for CMI is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 4.57 indicates that CMI is not in any danger for bankruptcy at the moment.
The Altman-Z score of CMI (4.57) is better than 71.21% 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.
Looking at the Debt to FCF ratio, with a value of 3.34, CMI is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
CMI has a Debt/Equity ratio of 0.62. This is a neutral value indicating CMI is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.62, CMI perfoms like the industry average, outperforming 40.91% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 3.34 | ||
| Altman-Z | 4.57 |
ROIC/WACC1.18
WACC9.25%
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.
CMI has a Current ratio of 1.77. This is in the lower half of the industry: CMI underperforms 62.12% 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 43.18% of its industry peers.
| 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.
CMI shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.79% yearly.
CMI shows a decrease in Revenue. In the last year, the revenue decreased by -1.80%.
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
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.
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 5Y15.06%
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.
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
Based on the Price/Earnings ratio of 22.26, the valuation of CMI can be described as rather expensive.
62.88% of the companies in the same industry are more expensive than CMI, based on the Price/Earnings ratio.
CMI's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.84.
CMI is valuated rather expensively with a Price/Forward Earnings ratio of 19.46.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CMI is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.40, CMI is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.26 | ||
| Fwd PE | 19.46 |
4.2 Price Multiples
CMI's Enterprise Value to EBITDA is on the same level as the industry average.
CMI's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.19 | ||
| EV/EBITDA | 14.6 |
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.
A more expensive valuation may be justified as CMI's earnings are expected to grow with 13.49% in the coming years.
PEG (NY)2.44
PEG (5Y)2.86
EPS Next 2Y11.26%
EPS Next 3Y13.49%
5. Dividend
5.1 Amount
CMI has a Yearly Dividend Yield of 1.55%.
Compared to an average industry Dividend Yield of 0.98, CMI pays a bit more dividend than its industry peers.
Compared to the average S&P500 Dividend Yield of 2.00, CMI is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.55% |
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 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.
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%
514.64
-4.48 (-0.86%)
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 Cap71.04B
Revenue(TTM)33.58B
Net Income(TTM)2.67B
Analysts74.81
Price Target541.33 (5.19%)
Short Float %1.4%
Short Ratio2.05
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.55% |
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)9.59%
PT rev (3m)30.73%
EPS NQ rev (1m)0.36%
EPS NQ rev (3m)6.62%
EPS NY rev (1m)4.42%
EPS NY rev (3m)3.82%
Revenue NQ rev (1m)0.01%
Revenue NQ rev (3m)0.25%
Revenue NY rev (1m)1.16%
Revenue NY rev (3m)1.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.26 | ||
| Fwd PE | 19.46 | ||
| P/S | 2.12 | ||
| P/FCF | 31.19 | ||
| P/OCF | 20.25 | ||
| P/B | 5.89 | ||
| P/tB | 9.48 | ||
| EV/EBITDA | 14.6 |
EPS(TTM)23.12
EY4.49%
EPS(NY)26.44
Fwd EY5.14%
FCF(TTM)16.5
FCFY3.21%
OCF(TTM)25.42
OCFY4.94%
SpS243.27
BVpS87.39
TBVpS54.31
PEG (NY)2.44
PEG (5Y)2.86
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 | 4.57 |
F-Score6
WACC9.25%
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 5Y15.06%
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.
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 9.11% 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%.