CUMMINS INC (CMI) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:CMI - US2310211063 - Common Stock
510.74 USD
+2.93 (+0.58%)
510.74 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to CMI. CMI was compared to 130 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. 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.
CMI had a positive operating cash flow in the past year.
Each year in the past 5 years CMI has been profitable.
CMI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
CMI has a Return On Assets of 7.93%. This is in the better half of the industry: CMI outperforms 75.38% of its industry peers.
With an excellent Return On Equity value of 22.12%, CMI belongs to the best of the industry, outperforming 88.46% of the companies in the same industry.
CMI has a Return On Invested Capital of 10.92%. This is in the better half of the industry: CMI outperforms 76.15% 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 10.39%.
The 3 year average ROIC (10.13%) for CMI is below the current ROIC(10.92%), indicating increased profibility in the last year.
| 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
CMI has a Profit Margin of 7.94%. This is in the better half of the industry: CMI outperforms 65.38% of its industry peers.
CMI's Profit Margin has improved in the last couple of years.
CMI has a better Operating Margin (12.01%) than 61.54% of its industry peers.
CMI's Operating Margin has been stable in the last couple of years.
With a Gross Margin value of 25.94%, 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 | 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.
Compared to 1 year ago, CMI has less shares outstanding
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 4.53. This indicates that CMI is financially healthy and has little risk of bankruptcy at the moment.
CMI has a Altman-Z score of 4.53. This is in the better half of the industry: CMI outperforms 70.77% 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's Debt to FCF ratio of 3.34 is fine compared to the rest of the industry. CMI outperforms 67.69% of its industry peers.
A Debt/Equity ratio of 0.62 indicates that CMI is somewhat dependend on debt financing.
The Debt to Equity ratio of CMI (0.62) is worse than 60.77% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 3.34 | ||
| Altman-Z | 4.53 |
ROIC/WACC1.19
WACC9.16%
2.3 Liquidity
A Current Ratio of 1.77 indicates that CMI should not have too much problems paying its short term obligations.
The Current ratio of CMI (1.77) is worse than 63.08% of its industry peers.
CMI has a Quick Ratio of 1.11. 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 1.11. This is comparable to the rest of the industry: CMI outperforms 41.54% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.77 | ||
| Quick Ratio | 1.11 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 14.51% over the past year.
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 -1.80%.
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)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
The Earnings Per Share is expected to grow by 15.06% on average over the next years. This is quite good.
The Revenue is expected to grow by 5.43% on average over the next years.
EPS Next Y4.49%
EPS Next 2Y8.38%
EPS Next 3Y11.56%
EPS Next 5Y15.06%
Revenue Next Year-2.35%
Revenue Next 2Y0.85%
Revenue Next 3Y3.41%
Revenue Next 5Y5.43%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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 22.09.
Compared to the rest of the industry, the Price/Earnings ratio of CMI indicates a somewhat cheap valuation: CMI is cheaper than 62.31% of the companies listed in the same industry.
CMI's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.37.
The Price/Forward Earnings ratio is 20.36, which indicates a rather expensive current valuation of CMI.
CMI's Price/Forward Earnings ratio is in line with the industry average.
CMI's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 36.20.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.09 | ||
| Fwd PE | 20.36 |
4.2 Price Multiples
CMI's Enterprise Value to EBITDA ratio is in line with the industry average.
CMI's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.95 | ||
| EV/EBITDA | 14.29 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of CMI may justify a higher PE ratio.
PEG (NY)4.92
PEG (5Y)2.84
EPS Next 2Y8.38%
EPS Next 3Y11.56%
5. Dividend
5.1 Amount
CMI has a Yearly Dividend Yield of 1.61%.
Compared to an average industry Dividend Yield of 1.90, CMI pays a bit more dividend than its industry peers.
CMI's Dividend Yield is slightly below the S&P500 average, which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.61% |
5.2 History
On average, the dividend of CMI grows each year by 7.08%, which is quite nice.
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 2Y8.38%
EPS Next 3Y11.56%
510.74
+2.93 (+0.58%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners87.11%
Inst Owner Change1.13%
Ins Owners0.31%
Ins Owner Change-0.92%
Market Cap70.50B
Revenue(TTM)33.58B
Net Income(TTM)2.67B
Analysts72.59
Price Target493.95 (-3.29%)
Short Float %1.05%
Short Ratio1.55
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.61% |
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)17.41%
PT rev (3m)19.28%
EPS NQ rev (1m)8.64%
EPS NQ rev (3m)6.25%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.62%
Revenue NQ rev (1m)0.47%
Revenue NQ rev (3m)0.2%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)-0.05%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.09 | ||
| Fwd PE | 20.36 | ||
| P/S | 2.1 | ||
| P/FCF | 30.95 | ||
| P/OCF | 20.09 | ||
| P/B | 5.84 | ||
| P/tB | 9.4 | ||
| EV/EBITDA | 14.29 |
EPS(TTM)23.12
EY4.53%
EPS(NY)25.09
Fwd EY4.91%
FCF(TTM)16.5
FCFY3.23%
OCF(TTM)25.42
OCFY4.98%
SpS243.27
BVpS87.39
TBVpS54.31
PEG (NY)4.92
PEG (5Y)2.84
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 | 4.53 |
F-Score6
WACC9.16%
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)14.51%
EPS 3Y13.63%
EPS 5Y7.79%
EPS Q2Q%-4.61%
EPS Next Y4.49%
EPS Next 2Y8.38%
EPS Next 3Y11.56%
EPS Next 5Y15.06%
Revenue 1Y (TTM)-1.8%
Revenue growth 3Y12.39%
Revenue growth 5Y7.67%
Sales Q2Q%-1.64%
Revenue Next Year-2.35%
Revenue Next 2Y0.85%
Revenue Next 3Y3.41%
Revenue Next 5Y5.43%
EBIT growth 1Y17.83%
EBIT growth 3Y18.42%
EBIT growth 5Y7.91%
EBIT Next Year43.48%
EBIT Next 3Y20.19%
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 4.49% 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%.