CUMMINS INC (CMI) Stock Fundamental Analysis
USA - NYSE:CMI - US2310211063 - Common Stock
473.34 USD
+10.54 (+2.28%)
474.99 USD
+1.65 (+0.35%)
We assign a fundamental rating of 5 out of 10 to CMI. CMI was compared to 130 industry peers in the Machinery industry. CMI scores excellent on profitability, but there are some minor concerns on its financial health. While showing a medium growth rate, CMI is valued expensive at the moment. Finally CMI also has an excellent dividend rating.
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.
In the past 5 years CMI always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 8.58%, CMI is in the better half of the industry, outperforming 73.08% of the companies in the same industry.
With an excellent Return On Equity value of 24.95%, CMI belongs to the best of the industry, outperforming 90.77% of the companies in the same industry.
With a decent Return On Invested Capital value of 11.02%, CMI is doing good in the industry, outperforming 76.92% 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 3 year average ROIC (10.13%) for CMI is below the current ROIC(11.02%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.58% | ||
| ROE | 24.95% | ||
| ROIC | 11.02% |
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 8.72%. This is in the better half of the industry: CMI outperforms 66.15% 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 11.96%, CMI is in the better half of the industry, outperforming 60.77% of the companies in the same industry.
CMI's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 25.96%, CMI is doing worse than 63.08% of the companies in the same industry.
CMI's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.96% | ||
| PM (TTM) | 8.72% | ||
| GM | 25.96% |
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.
The number of shares outstanding for CMI has been reduced compared to 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 4.21 indicates that CMI is not in any danger for bankruptcy at the moment.
CMI has a better Altman-Z score (4.21) than 66.92% of its industry peers.
CMI has a debt to FCF ratio of 4.91. This is a neutral value as CMI would need 4.91 years to pay back of all of its debts.
CMI has a Debt to FCF ratio (4.91) which is comparable to the rest of the industry.
CMI has a Debt/Equity ratio of 0.64. This is a neutral value indicating CMI is somewhat dependend on debt financing.
CMI has a worse Debt to Equity ratio (0.64) than 65.38% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 4.91 | ||
| Altman-Z | 4.21 |
ROIC/WACC1.19
WACC9.27%
2.3 Liquidity
A Current Ratio of 1.64 indicates that CMI should not have too much problems paying its short term obligations.
With a Current ratio value of 1.64, CMI is not doing good in the industry: 65.38% of the companies in the same industry are doing better.
A Quick Ratio of 1.03 indicates that CMI should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.03, CMI is not doing good in the industry: 61.54% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.64 | ||
| Quick Ratio | 1.03 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 14.51% over the past year.
The Earnings Per Share has been growing slightly by 7.79% on average over the past years.
The Revenue has been growing slightly by 0.11% in the past 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)0.11%
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 13.18% yearly.
Based on estimates for the next years, CMI will show a small growth in Revenue. The Revenue will grow by 6.35% on average per year.
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
Based on the Price/Earnings ratio of 20.47, the valuation of CMI can be described as rather expensive.
CMI's Price/Earnings ratio is a bit cheaper when compared to the industry. CMI is cheaper than 66.92% of the companies in the same industry.
CMI is valuated rather cheaply when we compare the Price/Earnings ratio to 25.83, which is the current average of the S&P500 Index.
CMI is valuated rather expensively with a Price/Forward Earnings ratio of 18.87.
CMI's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 32.68. CMI is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.47 | ||
| Fwd PE | 18.87 |
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 indicates a slightly more expensive valuation: CMI is more expensive than 60.77% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.48 | ||
| EV/EBITDA | 13.16 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of CMI may justify a higher PE ratio.
PEG (NY)4.56
PEG (5Y)2.63
EPS Next 2Y8.38%
EPS Next 3Y11.56%
5. Dividend
5.1 Amount
CMI has a Yearly Dividend Yield of 1.73%. Purely for dividend investing, there may be better candidates out there.
CMI's Dividend Yield is rather good when compared to the industry average which is at 1.83. CMI pays more dividend than 82.31% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 2.39, CMI is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.73% |
5.2 History
The dividend of CMI is nicely growing with an annual growth rate of 7.08%!
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
CMI pays out 34.07% of its income as dividend. This is a sustainable payout ratio.
CMI's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP34.07%
EPS Next 2Y8.38%
EPS Next 3Y11.56%
473.34
+10.54 (+2.28%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners87.11%
Inst Owner Change-0.92%
Ins Owners0.31%
Ins Owner Change0.17%
Market Cap65.22B
Revenue(TTM)34.10B
Net Income(TTM)2.94B
Analysts72.59
Price Target443.27 (-6.35%)
Short Float %1.06%
Short Ratio1.77
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.73% |
Yearly Dividend6.94
Dividend Growth(5Y)7.08%
DP34.07%
Div Incr Years19
Div Non Decr Years20
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)22.2%
Min EPS beat(2)20.37%
Max EPS beat(2)24.03%
EPS beat(4)4
Avg EPS beat(4)18.47%
Min EPS beat(4)8.66%
Max EPS beat(4)24.03%
EPS beat(8)5
Avg EPS beat(8)8.17%
EPS beat(12)6
Avg EPS beat(12)2.56%
EPS beat(16)8
Avg EPS beat(16)2.18%
Revenue beat(2)1
Avg Revenue beat(2)0.12%
Min Revenue beat(2)-1.21%
Max Revenue beat(2)1.44%
Revenue beat(4)3
Avg Revenue beat(4)1.2%
Min Revenue beat(4)-1.21%
Max Revenue beat(4)3.63%
Revenue beat(8)6
Avg Revenue beat(8)1.69%
Revenue beat(12)10
Avg Revenue beat(12)2.7%
Revenue beat(16)13
Avg Revenue beat(16)2.41%
PT rev (1m)7.04%
PT rev (3m)18.87%
EPS NQ rev (1m)-0.58%
EPS NQ rev (3m)-3.53%
EPS NY rev (1m)-0.58%
EPS NY rev (3m)6.25%
Revenue NQ rev (1m)0.24%
Revenue NQ rev (3m)-2.94%
Revenue NY rev (1m)-0.05%
Revenue NY rev (3m)-0.35%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.47 | ||
| Fwd PE | 18.87 | ||
| P/S | 1.93 | ||
| P/FCF | 39.48 | ||
| P/OCF | 22.93 | ||
| P/B | 5.53 | ||
| P/tB | 9.37 | ||
| EV/EBITDA | 13.16 |
EPS(TTM)23.12
EY4.88%
EPS(NY)25.09
Fwd EY5.3%
FCF(TTM)11.99
FCFY2.53%
OCF(TTM)20.64
OCFY4.36%
SpS244.72
BVpS85.56
TBVpS50.52
PEG (NY)4.56
PEG (5Y)2.63
Graham Number210.97
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.58% | ||
| ROE | 24.95% | ||
| ROCE | 16.84% | ||
| ROIC | 11.02% | ||
| ROICexc | 12.59% | ||
| ROICexgc | 16.23% | ||
| OM | 11.96% | ||
| PM (TTM) | 8.72% | ||
| GM | 25.96% | ||
| FCFM | 4.9% |
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-Score5
Asset Turnover0.98
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 4.91 | ||
| Debt/EBITDA | 1.46 | ||
| Cap/Depr | 109.86% | ||
| Cap/Sales | 3.53% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 55.57% | ||
| Profit Quality | 56.17% | ||
| Current Ratio | 1.64 | ||
| Quick Ratio | 1.03 | ||
| Altman-Z | 4.21 |
F-Score5
WACC9.27%
ROIC/WACC1.19
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)0.11%
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 1Y22.51%
EBIT growth 3Y18.42%
EBIT growth 5Y7.91%
EBIT Next Year43.48%
EBIT Next 3Y20.19%
EBIT Next 5Y16.76%
FCF growth 1Y47.24%
FCF growth 3Y-42.53%
FCF growth 5Y-35.01%
OCF growth 1Y30.64%
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 34.07%.