Why NYSE:CMI provides a good dividend, while having solid fundamentals.

CUMMINS INC (NYSE:CMI) was identified as a stock worth exploring by dividend investors by our stock screener. NYSE:CMI scores well on profitability, solvency and liquidity. At the same time it seems to pay a decent dividend. We'll explore this a bit deeper below.

Assessing Dividend for NYSE:CMI

An integral part of ChartMill's stock analysis is the Dividend Rating, which spans from 0 to 10. This rating evaluates diverse dividend factors, including yield, historical data, growth, and sustainability. NYSE:CMI has received a 7 out of 10:

• CMI's Dividend Yield is rather good when compared to the industry average which is at 2.03. CMI pays more dividend than 91.54% of the companies in the same industry.
• On average, the dividend of CMI grows each year by 7.50%, which is quite nice.
• CMI has paid a dividend for at least 10 years, which is a reliable track record.
• CMI has not decreased their dividend for at least 10 years, which is a reliable track record.
• CMI pays out 32.36% of its income as dividend. This is a sustainable payout ratio.

Health Assessment of NYSE:CMI

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NYSE:CMI has earned a 5 out of 10:

• CMI has an Altman-Z score of 3.26. This indicates that CMI is financially healthy and has little risk of bankruptcy at the moment.
• With a decent Altman-Z score value of 3.26, CMI is doing good in the industry, outperforming 64.62% of the companies in the same industry.
• CMI has a debt to FCF ratio of 3.38. This is a good value and a sign of high solvency as CMI would need 3.38 years to pay back of all of its debts.
• The Debt to FCF ratio of CMI (3.38) is better than 67.69% of its industry peers.

How do we evaluate the Profitability for NYSE:CMI?

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:CMI, the assigned 7 is noteworthy for profitability:

• CMI has a Return On Assets of 8.71%. This is in the better half of the industry: CMI outperforms 73.85% of its industry peers.
• Looking at the Return On Equity, with a value of 26.24%, CMI belongs to the top of the industry, outperforming 88.46% of the companies in the same industry.
• Looking at the Return On Invested Capital, with a value of 11.30%, CMI is in the better half of the industry, outperforming 73.85% of the companies in the same industry.
• The 3 year average ROIC (9.47%) for CMI is below the current ROIC(11.30%), indicating increased profibility in the last year.
• CMI has a Profit Margin of 8.40%. This is in the better half of the industry: CMI outperforms 67.69% of its industry peers.
• CMI's Profit Margin has improved in the last couple of years.

More Best Dividend stocks can be found in our Best Dividend screener.

Our latest full fundamental report of CMI contains the most current fundamental analsysis.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.