CUMMINS INC (CMI) Stock Fundamental Analysis
USA - NYSE:CMI - US2310211063 - Common Stock
415.44 USD
+1.24 (+0.3%)
415.44 USD
0 (0%)
CMI gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 128 industry peers in the Machinery industry. While CMI has a great profitability rating, there are some minor concerns on its financial health. CMI has a decent growth rate and is not valued too expensively. 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.
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
Looking at the Return On Assets, with a value of 8.58%, CMI is in the better half of the industry, outperforming 73.44% 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 91.41% 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 77.34% 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 10.02%.
The last Return On Invested Capital (11.02%) for CMI is above the 3 year average (10.13%), which is a sign of increasing profitability.
| 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's Profit Margin of 8.72% is fine compared to the rest of the industry. CMI outperforms 67.19% of its industry peers.
CMI's Profit Margin has improved in the last couple of years.
The Operating Margin of CMI (11.96%) is better than 60.94% of its industry peers.
In the last couple of years the Operating Margin of CMI has remained more or less at the same level.
The Gross Margin of CMI (25.96%) is worse than 62.50% of its industry peers.
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so CMI is still creating some value.
Compared to 1 year ago, CMI has less shares outstanding
The number of shares outstanding for CMI has been reduced compared to 5 years ago.
Compared to 1 year ago, CMI has a worse debt to assets ratio.
2.2 Solvency
CMI has an Altman-Z score of 4.03. This indicates that CMI is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of CMI (4.03) is better than 68.75% 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.
The Debt to Equity ratio of CMI (0.64) is worse than 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 4.91 | ||
| Altman-Z | 4.03 |
ROIC/WACC1.14
WACC9.64%
2.3 Liquidity
A Current Ratio of 1.64 indicates that CMI should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.64, CMI is doing worse than 65.63% of the companies in the same industry.
A Quick Ratio of 1.03 indicates that CMI should not have too much problems paying its short term obligations.
The Quick ratio of CMI (1.03) is worse than 60.94% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.64 | ||
| Quick Ratio | 1.03 |
3. Growth
3.1 Past
CMI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 23.63%, which is quite impressive.
The Earnings Per Share has been growing slightly by 7.79% on average over the past years.
The Revenue has decreased by -1.33% in the past year.
Measured over the past years, CMI shows a small growth in Revenue. The Revenue has been growing by 7.67% on average per year.
EPS 1Y (TTM)23.63%
EPS 3Y13.63%
EPS 5Y7.79%
EPS Q2Q%22.24%
Revenue 1Y (TTM)-1.33%
Revenue growth 3Y12.39%
Revenue growth 5Y7.67%
Sales Q2Q%-1.74%
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.
CMI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.35% yearly.
EPS Next Y5.14%
EPS Next 2Y9.48%
EPS Next 3Y11.45%
EPS Next 5Y13.18%
Revenue Next Year-2.37%
Revenue Next 2Y1.75%
Revenue Next 3Y3.74%
Revenue Next 5Y6.35%
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 stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 17.76, the valuation of CMI can be described as rather expensive.
Based on the Price/Earnings ratio, CMI is valued a bit cheaper than 75.78% of the companies in the same industry.
CMI's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.27.
A Price/Forward Earnings ratio of 16.23 indicates a correct valuation of CMI.
Based on the Price/Forward Earnings ratio, CMI is valued a bit cheaper than the industry average as 73.44% of the companies are valued more expensively.
CMI is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.77, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.76 | ||
| Fwd PE | 16.23 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CMI is valued a bit cheaper than 68.75% of the companies in the same industry.
60.94% of the companies in the same industry are cheaper than CMI, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.65 | ||
| EV/EBITDA | 11.85 |
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)3.45
PEG (5Y)2.28
EPS Next 2Y9.48%
EPS Next 3Y11.45%
5. Dividend
5.1 Amount
CMI has a Yearly Dividend Yield of 1.95%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 1.74, CMI pays a better dividend. On top of this CMI pays more dividend than 85.94% of the companies listed in the same industry.
CMI's Dividend Yield is comparable with the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.95% |
5.2 History
On average, the dividend of CMI grows each year by 7.08%, which is quite nice.
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 34.07% 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.
DP34.07%
EPS Next 2Y9.48%
EPS Next 3Y11.45%
415.44
+1.24 (+0.3%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners86.41%
Inst Owner Change-1.74%
Ins Owners0.31%
Ins Owner Change0.17%
Market Cap57.24B
Analysts71.85
Price Target414.1 (-0.32%)
Short Float %1.09%
Short Ratio1.69
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.95% |
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)12.26%
PT rev (3m)14.57%
EPS NQ rev (1m)-0.83%
EPS NQ rev (3m)-2.52%
EPS NY rev (1m)6.91%
EPS NY rev (3m)6.58%
Revenue NQ rev (1m)-0.17%
Revenue NQ rev (3m)-3.24%
Revenue NY rev (1m)-0.32%
Revenue NY rev (3m)-0.14%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.76 | ||
| Fwd PE | 16.23 | ||
| P/S | 1.7 | ||
| P/FCF | 34.65 | ||
| P/OCF | 20.13 | ||
| P/B | 4.86 | ||
| P/tB | 8.22 | ||
| EV/EBITDA | 11.85 |
EPS(TTM)23.39
EY5.63%
EPS(NY)25.6
Fwd EY6.16%
FCF(TTM)11.99
FCFY2.89%
OCF(TTM)20.64
OCFY4.97%
SpS244.72
BVpS85.56
TBVpS50.52
PEG (NY)3.45
PEG (5Y)2.28
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%
ROICexcg growth 3Y9.39%
ROICexcg 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 | 4.03 |
F-Score5
WACC9.64%
ROIC/WACC1.14
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)23.63%
EPS 3Y13.63%
EPS 5Y7.79%
EPS Q2Q%22.24%
EPS Next Y5.14%
EPS Next 2Y9.48%
EPS Next 3Y11.45%
EPS Next 5Y13.18%
Revenue 1Y (TTM)-1.33%
Revenue growth 3Y12.39%
Revenue growth 5Y7.67%
Sales Q2Q%-1.74%
Revenue Next Year-2.37%
Revenue Next 2Y1.75%
Revenue Next 3Y3.74%
Revenue Next 5Y6.35%
EBIT growth 1Y22.51%
EBIT growth 3Y18.42%
EBIT growth 5Y7.91%
EBIT Next Year37.52%
EBIT Next 3Y15.58%
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%