CUMMINS INC (CMI) Stock Fundamental Analysis
USA - NYSE:CMI - US2310211063 - Common Stock
474.49 USD
+9.57 (+2.06%)
CMI gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 130 industry peers in the Machinery industry. While CMI belongs to the best of the industry regarding profitability, 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. These ratings could make CMI a good candidate 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.
In the past 5 years CMI has always been profitable.
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 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.
The Average Return On Invested Capital over the past 3 years 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'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 61.54% 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 62.31% 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.
The number of shares outstanding for CMI has been reduced compared to 1 year ago.
Compared to 5 years ago, CMI has less shares outstanding
CMI has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 4.36 indicates that CMI is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.36, CMI is in the better half of the industry, outperforming 70.77% 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 66.92% of its industry peers.
A Debt/Equity ratio of 0.62 indicates that CMI is somewhat dependend on debt financing.
The Debt to Equity ratio of CMI (0.62) is worse than 61.54% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 3.34 | ||
| Altman-Z | 4.36 |
ROIC/WACC1.18
WACC9.26%
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: 63.08% 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 40.77% 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.
CMI shows a decrease in Revenue. In the last year, the revenue decreased by -1.80%.
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
Based on estimates for the next years, CMI will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.18% on average per year.
CMI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.35% yearly.
EPS Next Y4.49%
EPS Next 2Y8.38%
EPS Next 3Y11.56%
EPS Next 5Y13.18%
Revenue Next Year-2.35%
Revenue Next 2Y0.85%
Revenue Next 3Y3.41%
Revenue Next 5Y6.35%
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 stable.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 20.52, CMI is valued on the expensive side.
CMI's Price/Earnings ratio is a bit cheaper when compared to the industry. CMI is cheaper than 65.38% of the companies in the same industry.
CMI is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 25.46, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 18.91, which indicates a rather expensive current valuation of CMI.
CMI's Price/Forward Earnings ratio is in line with the industry average.
CMI's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 35.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.52 | ||
| Fwd PE | 18.91 |
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.
The rest of the industry has a similar Price/Free Cash Flow ratio as CMI.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.7 | ||
| EV/EBITDA | 13.12 |
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.
PEG (NY)4.57
PEG (5Y)2.63
EPS Next 2Y8.38%
EPS Next 3Y11.56%
5. Dividend
5.1 Amount
CMI has a Yearly Dividend Yield of 1.71%.
CMI's Dividend Yield is rather good when compared to the industry average which is at 1.87. CMI pays more dividend than 80.77% of the companies in the same industry.
CMI's Dividend Yield is slightly below the S&P500 average, which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.71% |
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 2Y8.38%
EPS Next 3Y11.56%
NYSE:CMI (11/19/2025, 2:58:14 PM)
474.49
+9.57 (+2.06%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners87.11%
Inst Owner Change1.01%
Ins Owners0.31%
Ins Owner Change-1.25%
Market Cap65.38B
Revenue(TTM)33.58B
Net Income(TTM)2.67B
Analysts72.59
Price Target443.27 (-6.58%)
Short Float %1.18%
Short Ratio1.78
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.71% |
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)5.36%
PT rev (3m)20.17%
EPS NQ rev (1m)2.1%
EPS NQ rev (3m)0.93%
EPS NY rev (1m)-0.58%
EPS NY rev (3m)6.25%
Revenue NQ rev (1m)0.53%
Revenue NQ rev (3m)0.62%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)-0.3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.52 | ||
| Fwd PE | 18.91 | ||
| P/S | 1.95 | ||
| P/FCF | 28.7 | ||
| P/OCF | 18.63 | ||
| P/B | 5.42 | ||
| P/tB | 8.72 | ||
| EV/EBITDA | 13.12 |
EPS(TTM)23.12
EY4.87%
EPS(NY)25.09
Fwd EY5.29%
FCF(TTM)16.53
FCFY3.48%
OCF(TTM)25.47
OCFY5.37%
SpS243.71
BVpS87.55
TBVpS54.41
PEG (NY)4.57
PEG (5Y)2.63
Graham Number213.41
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 | 4.36 |
F-Score6
WACC9.26%
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 Y4.49%
EPS Next 2Y8.38%
EPS Next 3Y11.56%
EPS Next 5Y13.18%
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 5Y6.35%
EBIT growth 1Y17.83%
EBIT growth 3Y18.42%
EBIT growth 5Y7.91%
EBIT Next Year43.48%
EBIT Next 3Y20.19%
EBIT Next 5Y16.76%
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%.