CUMMINS INC (CMI) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:CMI - US2310211063 - Common Stock
472.51 USD
+7.32 (+1.57%)
473 USD
+0.49 (+0.1%)
We assign a fundamental rating of 5 out of 10 to CMI. CMI was compared to 130 industry peers in the Machinery industry. CMI has an excellent profitability rating, but 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. 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.
CMI had positive earnings in each of the past 5 years.
In the past 5 years CMI always reported a positive cash flow from operatings.
1.2 Ratios
With a decent Return On Assets value of 7.93%, CMI is doing good in the industry, outperforming 75.38% of the companies in the same industry.
CMI has a better Return On Equity (22.12%) than 88.46% of its industry peers.
CMI has a better Return On Invested Capital (10.92%) than 76.15% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital 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
The Profit Margin of CMI (7.94%) is better than 64.62% of its industry peers.
CMI's Profit Margin has improved in the last couple of years.
The Operating Margin of CMI (12.01%) is better 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.
CMI has less shares outstanding than it did 1 year ago.
CMI has less shares outstanding than it did 5 years ago.
The debt/assets ratio for CMI is higher compared to a year ago.
2.2 Solvency
CMI has an Altman-Z score of 4.36. This indicates that CMI is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of CMI (4.36) is better than 70.77% 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.
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.
CMI has a Debt/Equity ratio of 0.62. This is a neutral value indicating 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/WACC1.19
WACC9.2%
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.
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.
CMI has a Quick ratio (1.11) which is in line with its industry peers.
| 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.
CMI shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.79% yearly.
Looking at the last year, CMI shows a decrease in Revenue. The Revenue has decreased by -1.80% in the last 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.
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.
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
The Price/Earnings ratio is 20.44, which indicates a rather expensive current valuation of CMI.
Based on the Price/Earnings ratio, CMI is valued a bit cheaper than the industry average as 64.62% of the companies are valued more expensively.
CMI's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 25.45.
The Price/Forward Earnings ratio is 18.83, which indicates a rather expensive current valuation of CMI.
CMI's Price/Forward Earnings is on the same level as the industry average.
When comparing the Price/Forward Earnings ratio of CMI to the average of the S&P500 Index (34.46), we can say CMI is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.44 | ||
| Fwd PE | 18.83 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as CMI.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CMI is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.58 | ||
| EV/EBITDA | 13.12 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
CMI has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)4.55
PEG (5Y)2.62
EPS Next 2Y8.38%
EPS Next 3Y11.56%
5. Dividend
5.1 Amount
CMI has a Yearly Dividend Yield of 1.72%. 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 1.95. CMI pays more dividend than 80.77% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 2.42, CMI is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.72% |
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
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%
472.51
+7.32 (+1.57%)
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 Cap65.11B
Revenue(TTM)33.58B
Net Income(TTM)2.67B
Analysts72.59
Price Target493.95 (4.54%)
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)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 | 20.44 | ||
| Fwd PE | 18.83 | ||
| P/S | 1.94 | ||
| P/FCF | 28.58 | ||
| P/OCF | 18.55 | ||
| P/B | 5.4 | ||
| P/tB | 8.68 | ||
| EV/EBITDA | 13.12 |
EPS(TTM)23.12
EY4.89%
EPS(NY)25.09
Fwd EY5.31%
FCF(TTM)16.53
FCFY3.5%
OCF(TTM)25.47
OCFY5.39%
SpS243.71
BVpS87.55
TBVpS54.41
PEG (NY)4.55
PEG (5Y)2.62
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
WACC9.2%
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)-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%.