CUMMINS INC (CMI) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:CMI - US2310211063 - Common Stock
517.6 USD
+0.51 (+0.1%)
517.6 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to CMI. CMI was compared to 132 industry peers in the Machinery industry. While CMI belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. CMI is valied quite expensively at the moment, while it does show a decent growth rate. Finally CMI also has an excellent dividend rating. This makes CMI very considerable for dividend investing!
1. Profitability
1.1 Basic Checks
CMI had positive earnings in the past year.
In the past year CMI had a positive cash flow from operations.
In the past 5 years CMI has always been profitable.
CMI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 7.93%, CMI is in the better half of the industry, outperforming 73.48% of the companies in the same industry.
CMI's Return On Equity of 22.12% is amongst the best of the industry. CMI outperforms 89.39% of its industry peers.
CMI's Return On Invested Capital of 10.92% is fine compared to the rest of the industry. CMI outperforms 75.00% 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 10.27%.
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
With a decent Profit Margin value of 7.94%, CMI is doing good in the industry, outperforming 65.91% of the companies in the same industry.
In the last couple of years the Profit Margin of CMI has grown nicely.
With a decent Operating Margin value of 12.01%, CMI is doing good in the industry, outperforming 62.12% of the companies in the same industry.
CMI's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 25.94%, CMI is doing worse than 62.12% 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 | 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
CMI has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it 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
An Altman-Z score of 4.57 indicates that CMI is not in any danger for bankruptcy at the moment.
CMI has a Altman-Z score of 4.57. This is in the better half of the industry: CMI outperforms 72.73% of its industry peers.
CMI has a debt to FCF ratio of 3.34. This is a good value and a sign of high solvency as CMI would need 3.34 years to pay back of all of its debts.
CMI has a Debt to FCF ratio of 3.34. This is in the better half of the industry: CMI outperforms 66.67% of its industry peers.
A Debt/Equity ratio of 0.62 indicates that CMI is somewhat dependend on debt financing.
CMI has a Debt to Equity ratio of 0.62. This is comparable to the rest of the industry: CMI outperforms 40.15% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 3.34 | ||
| Altman-Z | 4.57 |
ROIC/WACC1.18
WACC9.23%
2.3 Liquidity
CMI has a Current Ratio of 1.77. 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 Current ratio of 1.77. This is in the lower half of the industry: CMI underperforms 62.12% of its industry peers.
A Quick Ratio of 1.11 indicates that CMI should not have too much problems paying its short term obligations.
The Quick ratio of CMI (1.11) is comparable to the rest of the industry.
| 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.
The Earnings Per Share has been growing slightly by 7.79% on average over the past years.
Looking at the last year, CMI shows a decrease in Revenue. The Revenue has decreased by -1.80% in the last year.
CMI shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.67% yearly.
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
Based on estimates for the next years, CMI will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.06% on average per year.
Based on estimates for the next years, CMI will show a small growth in Revenue. The Revenue will grow by 5.43% on average per year.
EPS Next Y9.08%
EPS Next 2Y11.2%
EPS Next 3Y13.42%
EPS Next 5Y15.06%
Revenue Next Year-1.23%
Revenue Next 2Y2.05%
Revenue Next 3Y4.23%
Revenue Next 5Y5.43%
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 decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
CMI is valuated rather expensively with a Price/Earnings ratio of 22.39.
Compared to the rest of the industry, the Price/Earnings ratio of CMI indicates a somewhat cheap valuation: CMI is cheaper than 62.88% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 26.59. CMI is around the same levels.
CMI is valuated rather expensively with a Price/Forward Earnings ratio of 19.60.
CMI's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.03, CMI is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.39 | ||
| Fwd PE | 19.6 |
4.2 Price Multiples
CMI's Enterprise Value to EBITDA ratio is in line with the industry average.
CMI's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.36 | ||
| EV/EBITDA | 14.56 |
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.
A more expensive valuation may be justified as CMI's earnings are expected to grow with 13.42% in the coming years.
PEG (NY)2.47
PEG (5Y)2.87
EPS Next 2Y11.2%
EPS Next 3Y13.42%
5. Dividend
5.1 Amount
CMI has a Yearly Dividend Yield of 1.60%.
Compared to an average industry Dividend Yield of 1.04, CMI pays a bit more dividend than its industry peers.
CMI's Dividend Yield is comparable with the S&P500 average which is at 1.88.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.6% |
5.2 History
The dividend of CMI is nicely growing with an annual growth rate of 7.08%!
CMI has been paying a dividend for at least 10 years, so it has 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
CMI pays out 38.53% 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.
DP38.53%
EPS Next 2Y11.2%
EPS Next 3Y13.42%
517.6
+0.51 (+0.1%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners87.13%
Inst Owner Change1.17%
Ins Owners0.3%
Ins Owner Change-0.92%
Market Cap71.45B
Revenue(TTM)33.58B
Net Income(TTM)2.67B
Analysts74.81
Price TargetN/A
Short Float %1.4%
Short Ratio2.05
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.6% |
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)18.8%
PT rev (3m)27.17%
EPS NQ rev (1m)0.85%
EPS NQ rev (3m)6.61%
EPS NY rev (1m)4.39%
EPS NY rev (3m)3.74%
Revenue NQ rev (1m)-0.02%
Revenue NQ rev (3m)0.21%
Revenue NY rev (1m)1.15%
Revenue NY rev (3m)1.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.39 | ||
| Fwd PE | 19.6 | ||
| P/S | 2.13 | ||
| P/FCF | 31.36 | ||
| P/OCF | 20.36 | ||
| P/B | 5.92 | ||
| P/tB | 9.53 | ||
| EV/EBITDA | 14.56 |
EPS(TTM)23.12
EY4.47%
EPS(NY)26.41
Fwd EY5.1%
FCF(TTM)16.5
FCFY3.19%
OCF(TTM)25.42
OCFY4.91%
SpS243.27
BVpS87.39
TBVpS54.31
PEG (NY)2.47
PEG (5Y)2.87
Graham Number213.22
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 | 4.57 |
F-Score6
WACC9.23%
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)14.51%
EPS 3Y13.63%
EPS 5Y7.79%
EPS Q2Q%-4.61%
EPS Next Y9.08%
EPS Next 2Y11.2%
EPS Next 3Y13.42%
EPS Next 5Y15.06%
Revenue 1Y (TTM)-1.8%
Revenue growth 3Y12.39%
Revenue growth 5Y7.67%
Sales Q2Q%-1.64%
Revenue Next Year-1.23%
Revenue Next 2Y2.05%
Revenue Next 3Y4.23%
Revenue Next 5Y5.43%
EBIT growth 1Y17.83%
EBIT growth 3Y18.42%
EBIT growth 5Y7.91%
EBIT Next Year45.85%
EBIT Next 3Y20.97%
EBIT Next 5Y19.2%
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 9.08% 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%.