CUMMINS INC (CMI) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:CMI - US2310211063 - Common Stock
497.43 USD
+2.49 (+0.5%)
We assign a fundamental rating of 5 out of 10 to CMI. CMI was compared to 130 industry peers in the Machinery industry. While CMI has a great profitability rating, there are some minor concerns on its financial health. CMI is quite expensive at the moment. It does show a decent growth rate. CMI also has an excellent dividend rating. This makes CMI very considerable for dividend investing!
1. Profitability
1.1 Basic Checks
CMI had positive earnings in the past year.
In the past year CMI had a positive cash flow from operations.
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 75.38% of its industry peers.
The Return On Equity of CMI (22.12%) is better than 88.46% of its industry peers.
The Return On Invested Capital of CMI (10.92%) is better than 76.15% 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 10.34%.
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
Looking at the Profit Margin, with a value of 7.94%, CMI is in the better half of the industry, outperforming 65.38% of the companies in the same industry.
CMI's Profit Margin has improved in the last couple of years.
CMI has a better Operating Margin (12.01%) than 61.54% of its industry peers.
CMI's Operating Margin has been stable in the last couple of years.
CMI has a worse Gross Margin (25.94%) 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
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 4.48. This indicates that CMI is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of CMI (4.48) is better than 71.54% of its industry peers.
CMI has a debt to FCF ratio of 3.34. This is a good value and a sign of high solvency as CMI would need 3.34 years to pay back of all of its debts.
CMI has a Debt to FCF ratio of 3.34. This is in the better half of the industry: CMI outperforms 67.69% of its industry peers.
CMI has a Debt/Equity ratio of 0.62. This is a neutral value indicating CMI is somewhat dependend on debt financing.
CMI's Debt to Equity ratio of 0.62 is on the low side compared to the rest of the industry. CMI is outperformed by 60.77% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 3.34 | ||
| Altman-Z | 4.48 |
ROIC/WACC1.2
WACC9.13%
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.
A Quick Ratio of 1.11 indicates that CMI should not have too much problems paying 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.
The Earnings Per Share has been growing slightly by 7.79% on average over the past years.
The Revenue has decreased by -1.80% in the past year.
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
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 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 21.52, CMI is valued on the expensive side.
Based on the Price/Earnings ratio, CMI is valued a bit cheaper than 64.62% of the companies in the same industry.
CMI's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 25.98.
Based on the Price/Forward Earnings ratio of 19.83, the valuation of CMI can be described as rather expensive.
CMI's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 35.79, CMI is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.52 | ||
| Fwd PE | 19.83 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as CMI.
CMI's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.09 | ||
| EV/EBITDA | 13.92 |
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)4.79
PEG (5Y)2.76
EPS Next 2Y8.38%
EPS Next 3Y11.56%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.72%, CMI has a reasonable but not impressive dividend return.
CMI's Dividend Yield is a higher than the industry average which is at 1.97.
CMI's Dividend Yield is slightly below the S&P500 average, which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.72% |
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
CMI pays out 38.53% 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.
DP38.53%
EPS Next 2Y8.38%
EPS Next 3Y11.56%
NYSE:CMI (11/26/2025, 1:13:36 PM)
497.43
+2.49 (+0.5%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners87.11%
Inst Owner Change1.12%
Ins Owners0.31%
Ins Owner Change-1.03%
Market Cap68.54B
Revenue(TTM)33.58B
Net Income(TTM)2.67B
Analysts72.59
Price Target493.95 (-0.7%)
Short Float %1.18%
Short Ratio1.78
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.72% |
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)17.41%
PT rev (3m)19.28%
EPS NQ rev (1m)8.11%
EPS NQ rev (3m)4.8%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.62%
Revenue NQ rev (1m)0.47%
Revenue NQ rev (3m)0.2%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)-0.05%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.52 | ||
| Fwd PE | 19.83 | ||
| P/S | 2.04 | ||
| P/FCF | 30.09 | ||
| P/OCF | 19.53 | ||
| P/B | 5.68 | ||
| P/tB | 9.14 | ||
| EV/EBITDA | 13.92 |
EPS(TTM)23.12
EY4.65%
EPS(NY)25.09
Fwd EY5.04%
FCF(TTM)16.53
FCFY3.32%
OCF(TTM)25.47
OCFY5.12%
SpS243.71
BVpS87.55
TBVpS54.41
PEG (NY)4.79
PEG (5Y)2.76
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 | 4.48 |
F-Score6
WACC9.13%
ROIC/WACC1.2
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%.