CUMMINS INC (CMI) Stock Fundamental Analysis
USA - NYSE:CMI - US2310211063 - Common Stock
438.09 USD
-3.17 (-0.72%)
438.09 USD
0 (0%)
Overall CMI gets a fundamental rating of 5 out of 10. We evaluated CMI against 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 not valued too expensively and it also shows a decent growth rate. Finally 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.
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
With a decent Return On Assets value of 8.58%, CMI is doing good in the industry, outperforming 73.85% of the companies in the same industry.
CMI's Return On Equity of 24.95% is amongst the best of the industry. CMI outperforms 91.54% of its industry peers.
CMI has a Return On Invested Capital of 11.02%. This is in the better half of the industry: CMI outperforms 77.69% 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 10.00%.
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
CMI has a Profit Margin of 8.72%. This is in the better half of the industry: CMI outperforms 66.92% of its industry peers.
In the last couple of years the Profit Margin of CMI has grown nicely.
Looking at the Operating Margin, with a value of 11.96%, CMI is in the better half of the industry, outperforming 62.31% of the companies in the same industry.
In the last couple of years the Operating Margin of CMI has remained more or less at the same level.
With a Gross Margin value of 25.96%, CMI is not doing good in the industry: 62.31% of the companies in the same industry are doing better.
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
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.
CMI has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 4.13 indicates that CMI is not in any danger for bankruptcy at the moment.
CMI's Altman-Z score of 4.13 is fine compared to the rest of the industry. CMI outperforms 66.92% 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.
With a Debt to FCF ratio value of 4.91, CMI perfoms like the industry average, outperforming 53.08% of the companies in the same industry.
CMI has a Debt/Equity ratio of 0.64. This is a neutral value indicating CMI is somewhat dependend on debt financing.
CMI has a Debt to Equity ratio of 0.64. This is in the lower half of the industry: CMI underperforms 63.08% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 4.91 | ||
| Altman-Z | 4.13 |
ROIC/WACC1.19
WACC9.27%
2.3 Liquidity
A Current Ratio of 1.64 indicates that CMI should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.64, CMI is doing worse than 66.15% of the companies in the same industry.
CMI has a Quick Ratio of 1.03. 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 of 1.03. This is in the lower half of the industry: CMI underperforms 60.77% 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.
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 -1.33% in the last 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
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.
The Revenue is expected to grow by 6.35% on average over the next years.
EPS Next Y4.49%
EPS Next 2Y8.38%
EPS Next 3Y11.66%
EPS Next 5Y13.18%
Revenue Next Year-2.39%
Revenue Next 2Y0.92%
Revenue Next 3Y3.53%
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
CMI is valuated rather expensively with a Price/Earnings ratio of 18.73.
Compared to the rest of the industry, the Price/Earnings ratio of CMI indicates a somewhat cheap valuation: CMI is cheaper than 70.00% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.19, CMI is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 17.46, the valuation of CMI can be described as rather expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CMI indicates a somewhat cheap valuation: CMI is cheaper than 62.31% of the companies listed in the same industry.
CMI is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.50, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.73 | ||
| Fwd PE | 17.46 |
4.2 Price Multiples
62.31% of the companies in the same industry are more expensive than CMI, based on the Enterprise Value to EBITDA ratio.
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 | 36.54 | ||
| EV/EBITDA | 12.58 |
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)4.17
PEG (5Y)2.4
EPS Next 2Y8.38%
EPS Next 3Y11.66%
5. Dividend
5.1 Amount
CMI has a Yearly Dividend Yield of 1.92%. 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 1.79. CMI pays more dividend than 83.85% of the companies in the same industry.
CMI's Dividend Yield is comparable with the S&P500 average which is at 2.33.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.92% |
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
CMI pays out 34.07% of its income as dividend. This is a sustainable payout ratio.
The dividend of CMI is growing, but earnings are growing more, so the dividend growth is sustainable.
DP34.07%
EPS Next 2Y8.38%
EPS Next 3Y11.66%
438.09
-3.17 (-0.72%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners87.11%
Inst Owner Change-0.07%
Ins Owners0.31%
Ins Owner Change0.17%
Market Cap60.36B
Revenue(TTM)33.72B
Net Income(TTM)2.94B
Analysts72.59
Price Target420.7 (-3.97%)
Short Float %1.06%
Short Ratio1.77
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.92% |
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)12.81%
EPS NQ rev (1m)-0.71%
EPS NQ rev (3m)-4.53%
EPS NY rev (1m)-0.58%
EPS NY rev (3m)6.25%
Revenue NQ rev (1m)0.15%
Revenue NQ rev (3m)-3.35%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)-0.22%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.73 | ||
| Fwd PE | 17.46 | ||
| P/S | 1.79 | ||
| P/FCF | 36.54 | ||
| P/OCF | 21.23 | ||
| P/B | 5.12 | ||
| P/tB | 8.67 | ||
| EV/EBITDA | 12.58 |
EPS(TTM)23.39
EY5.34%
EPS(NY)25.09
Fwd EY5.73%
FCF(TTM)11.99
FCFY2.74%
OCF(TTM)20.64
OCFY4.71%
SpS244.72
BVpS85.56
TBVpS50.52
PEG (NY)4.17
PEG (5Y)2.4
Graham Number212.2
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%
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-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 | 4.13 |
F-Score5
WACC9.27%
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)23.63%
EPS 3Y13.63%
EPS 5Y7.79%
EPS Q2Q%22.24%
EPS Next Y4.49%
EPS Next 2Y8.38%
EPS Next 3Y11.66%
EPS Next 5Y13.18%
Revenue 1Y (TTM)-1.33%
Revenue growth 3Y12.39%
Revenue growth 5Y7.67%
Sales Q2Q%-1.74%
Revenue Next Year-2.39%
Revenue Next 2Y0.92%
Revenue Next 3Y3.53%
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%
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 4 / 10 to CUMMINS INC (CMI). This can be considered as Fairly Valued.
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 8 / 10 and the dividend payout ratio is 34.07%.