CUMMINS INC (CMI) Stock Fundamental Analysis
USA - NYSE:CMI - US2310211063 - Common Stock
429.025 USD
+2.33 (+0.55%)
We assign a fundamental rating of 5 out of 10 to CMI. CMI was compared to 129 industry peers in the Machinery industry. While CMI has a great profitability rating, there are some minor concerns on its financial health. CMI is not valued too expensively and it also shows a decent growth rate. CMI also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
CMI had positive earnings in the past year.
CMI had a positive operating cash flow in the past year.
Each year in the past 5 years CMI has been profitable.
In the past 5 years CMI always reported a positive cash flow from operatings.
1.2 Ratios
CMI has a Return On Assets of 8.58%. This is in the better half of the industry: CMI outperforms 73.64% of its industry peers.
CMI's Return On Equity of 24.95% is amongst the best of the industry. CMI outperforms 91.47% of its industry peers.
CMI has a better Return On Invested Capital (11.02%) than 77.52% of its industry peers.
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 10.04%.
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
Looking at the Profit Margin, with a value of 8.72%, CMI is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
CMI's Profit Margin has improved in the last couple of years.
CMI's Operating Margin of 11.96% is fine compared to the rest of the industry. CMI outperforms 62.02% of its industry peers.
In the last couple of years the Operating Margin of CMI has remained more or less at the same level.
CMI has a Gross Margin of 25.96%. This is in the lower half of the industry: CMI underperforms 62.79% 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), CMI is creating some value.
The number of shares outstanding for CMI has been reduced compared to 1 year ago.
CMI has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, CMI has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 4.08 indicates that CMI is not in any danger for bankruptcy at the moment.
CMI's Altman-Z score of 4.08 is fine compared to the rest of the industry. CMI outperforms 65.89% 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's Debt to FCF ratio of 4.91 is in line compared to the rest of the industry. CMI outperforms 52.71% of its industry peers.
CMI has a Debt/Equity ratio of 0.64. This is a neutral value indicating CMI is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.64, CMI is doing worse than 62.02% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 4.91 | ||
| Altman-Z | 4.08 |
ROIC/WACC1.18
WACC9.37%
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 65.89% 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.
Looking at the Quick ratio, with a value of 1.03, CMI is doing worse than 61.24% of the companies in the same industry.
| 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.
CMI shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.79% yearly.
CMI shows a decrease in Revenue. In the last year, the revenue decreased by -1.33%.
The Revenue has been growing slightly by 7.67% on average over the past years.
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.
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 Y5.1%
EPS Next 2Y9.45%
EPS Next 3Y11.84%
EPS Next 5Y13.18%
Revenue Next Year-2.34%
Revenue Next 2Y1.74%
Revenue Next 3Y3.66%
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
With a Price/Earnings ratio of 18.34, CMI is valued on the expensive side.
69.77% of the companies in the same industry are more expensive than CMI, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of CMI to the average of the S&P500 Index (27.70), we can say CMI is valued slightly cheaper.
A Price/Forward Earnings ratio of 16.77 indicates a correct valuation of CMI.
64.34% of the companies in the same industry are more expensive than CMI, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 23.15. CMI is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.34 | ||
| Fwd PE | 16.77 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CMI is valued a bit cheaper than the industry average as 65.12% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, CMI is valued a bit more expensive than the industry average as 61.24% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 35.78 | ||
| EV/EBITDA | 12.19 |
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)3.6
PEG (5Y)2.35
EPS Next 2Y9.45%
EPS Next 3Y11.84%
5. Dividend
5.1 Amount
CMI has a Yearly Dividend Yield of 1.85%.
CMI's Dividend Yield is rather good when compared to the industry average which is at 1.77. CMI pays more dividend than 82.17% of the companies in the same industry.
CMI's Dividend Yield is slightly below the S&P500 average, which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.85% |
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 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
34.07% 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.
DP34.07%
EPS Next 2Y9.45%
EPS Next 3Y11.84%
NYSE:CMI (10/10/2025, 9:34:07 AM)
429.025
+2.33 (+0.55%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners87.11%
Inst Owner Change0.01%
Ins Owners0.31%
Ins Owner Change0.17%
Market Cap59.12B
Analysts72.59
Price Target420.7 (-1.94%)
Short Float %1.19%
Short Ratio1.83
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.85% |
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)1.59%
PT rev (3m)15.28%
EPS NQ rev (1m)-0.08%
EPS NQ rev (3m)-2.64%
EPS NY rev (1m)-0.04%
EPS NY rev (3m)6.87%
Revenue NQ rev (1m)-0.27%
Revenue NQ rev (3m)-3.33%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)-0.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.34 | ||
| Fwd PE | 16.77 | ||
| P/S | 1.75 | ||
| P/FCF | 35.78 | ||
| P/OCF | 20.79 | ||
| P/B | 5.01 | ||
| P/tB | 8.49 | ||
| EV/EBITDA | 12.19 |
EPS(TTM)23.39
EY5.45%
EPS(NY)25.59
Fwd EY5.96%
FCF(TTM)11.99
FCFY2.79%
OCF(TTM)20.64
OCFY4.81%
SpS244.72
BVpS85.56
TBVpS50.52
PEG (NY)3.6
PEG (5Y)2.35
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 | 4.08 |
F-Score5
WACC9.37%
ROIC/WACC1.18
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 Y5.1%
EPS Next 2Y9.45%
EPS Next 3Y11.84%
EPS Next 5Y13.18%
Revenue 1Y (TTM)-1.33%
Revenue growth 3Y12.39%
Revenue growth 5Y7.67%
Sales Q2Q%-1.74%
Revenue Next Year-2.34%
Revenue Next 2Y1.74%
Revenue Next 3Y3.66%
Revenue Next 5Y6.35%
EBIT growth 1Y22.51%
EBIT growth 3Y18.42%
EBIT growth 5Y7.91%
EBIT Next Year43.48%
EBIT Next 3Y20.19%
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%