CUMMINS INC (CMI) Stock Fundamental Analysis
USA - NYSE:CMI - US2310211063 - Common Stock
414.2 USD
+3.93 (+0.96%)
414.9 USD
+0.7 (+0.17%)
We assign a fundamental rating of 5 out of 10 to CMI. CMI was compared to 128 industry peers in the Machinery industry. CMI scores excellent on profitability, but there are some minor concerns on its financial health. CMI has a correct valuation and a medium growth rate. 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
The Return On Assets of CMI (8.58%) is better than 73.44% of its industry peers.
CMI has a Return On Equity of 24.95%. This is amongst the best in the industry. CMI outperforms 91.41% of its industry peers.
The Return On Invested Capital of CMI (11.02%) is better than 77.34% 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 10.02%.
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
Looking at the Profit Margin, with a value of 8.72%, CMI is in the better half of the industry, outperforming 67.19% of the companies in the same industry.
CMI's Profit Margin has improved in the last couple of years.
CMI has a Operating Margin of 11.96%. This is in the better half of the industry: CMI outperforms 60.94% of its industry peers.
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 62.50% of the companies in the same industry.
In the last couple of years the Gross Margin of CMI has remained more or less at the same level.
| 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.
CMI has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, CMI has less shares outstanding
The debt/assets ratio for CMI is higher compared to a year ago.
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.
Looking at the Altman-Z score, with a value of 4.03, CMI is in the better half of the industry, outperforming 68.75% of the companies in the same industry.
The Debt to FCF ratio of CMI is 4.91, which is a neutral value as it means it would take CMI, 4.91 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 4.91, CMI perfoms like the industry average, outperforming 50.78% of the companies in the same industry.
A Debt/Equity ratio of 0.64 indicates that CMI is somewhat dependend on debt financing.
CMI's Debt to Equity ratio of 0.64 is on the low side compared to the rest of the industry. CMI is outperformed by 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
CMI has a Current Ratio of 1.64. This is a normal value and indicates that CMI is financially healthy and should not expect problems in meeting 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.
CMI has a Quick ratio of 1.03. This is in the lower half of the industry: CMI underperforms 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.
Measured over the past 5 years, CMI shows a small growth in Earnings Per Share. The EPS has been growing by 7.79% on average per year.
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
Based on estimates for the next years, CMI will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.18% on average per year.
The Revenue is expected to grow by 6.35% on average over the next years.
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
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 17.71, CMI is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of CMI indicates a somewhat cheap valuation: CMI is cheaper than 75.78% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.27, CMI is valued a bit cheaper.
A Price/Forward Earnings ratio of 16.18 indicates a correct valuation of CMI.
CMI's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. CMI is cheaper than 73.44% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.77. CMI is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.71 | ||
| Fwd PE | 16.18 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CMI indicates a somewhat cheap valuation: CMI is cheaper than 68.75% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, CMI is valued a bit more expensive than the industry average as 60.94% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.55 | ||
| 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)3.44
PEG (5Y)2.27
EPS Next 2Y9.48%
EPS Next 3Y11.45%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.95%, CMI has a reasonable but not impressive dividend return.
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 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.
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 2Y9.48%
EPS Next 3Y11.45%
414.2
+3.93 (+0.96%)
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 Cap57.07B
Analysts71.85
Price Target414.1 (-0.02%)
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 | 17.71 | ||
| Fwd PE | 16.18 | ||
| P/S | 1.69 | ||
| P/FCF | 34.55 | ||
| P/OCF | 20.07 | ||
| P/B | 4.84 | ||
| P/tB | 8.2 | ||
| EV/EBITDA | 11.85 |
EPS(TTM)23.39
EY5.65%
EPS(NY)25.6
Fwd EY6.18%
FCF(TTM)11.99
FCFY2.89%
OCF(TTM)20.64
OCFY4.98%
SpS244.72
BVpS85.56
TBVpS50.52
PEG (NY)3.44
PEG (5Y)2.27
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%