CUMMINS INC (CMI)
US2310211063 - Common Stock
Taking everything into account, CMI scores 5 out of 10 in our fundamental rating. CMI was compared to 132 industry peers in the Machinery industry. CMI has an average financial health and profitability rating. CMI has a decent growth rate and is not valued too expensively.
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.
Each year in the past 5 years CMI has been profitable.
Each year in the past 5 years CMI had a positive operating cash flow.
1.2 Ratios
CMI has a Return On Assets (2.30%) which is comparable to the rest of the industry.
The Return On Equity of CMI (8.31%) is comparable to the rest of the industry.
The Return On Invested Capital of CMI (10.27%) is better than 68.99% 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 10.72%.
The 3 year average ROIC (8.89%) for CMI is below the current ROIC(10.27%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.3% | ||
| ROE | 8.31% | ||
| ROIC | 10.27% |
ROA(3y)6.13%
ROA(5y)7.55%
ROE(3y)19.14%
ROE(5y)21.94%
ROIC(3y)8.89%
ROIC(5y)9.03%
1.3 Margins
The Profit Margin of CMI (2.16%) is comparable to the rest of the industry.
In the last couple of years the Profit Margin of CMI has declined.
CMI has a Operating Margin (9.75%) which is comparable to the rest of the industry.
CMI's Operating Margin has been stable in the last couple of years.
With a Gross Margin value of 24.22%, CMI is not doing good in the industry: 60.47% 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 | 9.75% | ||
| PM (TTM) | 2.16% | ||
| GM | 24.22% |
OM growth 3Y1.52%
OM growth 5Y-0.76%
PM growth 3Y-37.95%
PM growth 5Y-24.86%
GM growth 3Y-0.66%
GM growth 5Y0.07%
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.
Compared to 1 year ago, CMI has more shares outstanding
CMI has less shares outstanding than it did 5 years ago.
The debt/assets ratio for CMI has been reduced compared to a year ago.
2.2 Solvency
CMI has an Altman-Z score of 3.27. This indicates that CMI is financially healthy and has little risk of bankruptcy at the moment.
CMI has a Altman-Z score (3.27) which is in line with its industry peers.
CMI has a debt to FCF ratio of 2.43. This is a good value and a sign of high solvency as CMI would need 2.43 years to pay back of all of its debts.
CMI's Debt to FCF ratio of 2.43 is fine compared to the rest of the industry. CMI outperforms 75.19% of its industry peers.
CMI has a Debt/Equity ratio of 0.74. This is a neutral value indicating CMI is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.74, CMI is doing worse than 71.32% of the companies in the same industry.
Although CMI does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.74 | ||
| Debt/FCF | 2.43 | ||
| Altman-Z | 3.27 |
ROIC/WACC1.17
WACC8.75%
2.3 Liquidity
A Current Ratio of 1.18 indicates that CMI should not have too much problems paying its short term obligations.
The Current ratio of CMI (1.18) is worse than 86.05% of its industry peers.
A Quick Ratio of 0.74 indicates that CMI may have some problems paying its short term obligations.
With a Quick ratio value of 0.74, CMI is not doing good in the industry: 79.84% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.18 | ||
| Quick Ratio | 0.74 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 18.05% over the past year.
Measured over the past 5 years, CMI shows a small growth in Earnings Per Share. The EPS has been growing by 6.29% on average per year.
CMI shows a strong growth in Revenue. In the last year, the Revenue has grown by 21.34%.
Measured over the past years, CMI shows a small growth in Revenue. The Revenue has been growing by 7.46% on average per year.
EPS 1Y (TTM)18.05%
EPS 3Y16.69%
EPS 5Y6.29%
EPS growth Q2Q-10.38%
Revenue 1Y (TTM)21.34%
Revenue growth 3Y19.8%
Revenue growth 5Y7.46%
Revenue growth Q2Q9.95%
3.2 Future
The Earnings Per Share is expected to grow by 2.45% on average over the next years.
CMI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.35% yearly.
EPS Next Y-3.44%
EPS Next 2Y4.84%
EPS Next 3Y7.14%
EPS Next 5Y2.45%
Revenue Next Year-2.03%
Revenue Next 2Y1.32%
Revenue Next 3Y2.81%
Revenue Next 5Y2.35%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 14.65, CMI is valued correctly.
Based on the Price/Earnings ratio, CMI is valued a bit cheaper than 76.74% of the companies in the same industry.
When comparing the Price/Earnings ratio of CMI to the average of the S&P500 Index (28.28), we can say CMI is valued slightly cheaper.
CMI is valuated correctly with a Price/Forward Earnings ratio of 15.17.
Based on the Price/Forward Earnings ratio, CMI is valued a bit cheaper than the industry average as 72.87% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 20.88. CMI is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.65 | ||
| Fwd PE | 15.17 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CMI is valued a bit cheaper than the industry average as 78.29% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, CMI is valued cheaper than 82.17% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.95 | ||
| EV/EBITDA | 9.2 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)2.33
EPS Next 2Y4.84%
EPS Next 3Y7.14%
5. Dividend
5.1 Amount
CMI has a Yearly Dividend Yield of 2.40%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 1.73, CMI pays a better dividend. On top of this CMI pays more dividend than 90.70% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.41, CMI has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.4% |
5.2 History
The dividend of CMI is nicely growing with an annual growth rate of 8.00%!
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)8%
Div Incr Years15
Div Non Decr Years15
5.3 Sustainability
125.31% of the earnings are spent on dividend by CMI. This is not a sustainable payout ratio.
CMI's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP125.31%
EPS Next 2Y4.84%
EPS Next 3Y7.14%
CUMMINS INC
NYSE:CMI (5/3/2024, 7:04:00 PM)
After market: 280.74 0 (0%)280.74
+0.45 (+0.16%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap38.39B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.4% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.65 | ||
| Fwd PE | 15.17 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)2.33
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.3% | ||
| ROE | 8.31% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 9.75% | ||
| PM (TTM) | 2.16% | ||
| GM | 24.22% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.06
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.74 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.18 | ||
| Quick Ratio | 0.74 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)18.05%
EPS 3Y16.69%
EPS 5Y
EPS growth Q2Q
EPS Next Y-3.44%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)21.34%
Revenue growth 3Y19.8%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y