CUMMINS INC (CMI) Stock Fundamental Analysis
NYSE:CMI - US2310211063 - Common Stock
398.38 USD
+2.28 (+0.58%)
CMI gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 127 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 has a correct valuation and a medium growth rate. Finally CMI also has an excellent dividend rating.
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.
CMI had positive earnings in each of the past 5 years.
Each year in the past 5 years CMI had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 8.58%, CMI is in the better half of the industry, outperforming 72.44% of the companies in the same industry.
CMI has a better Return On Equity (24.95%) than 90.55% 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 76.38% 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 10.48%.
The 3 year average ROIC (10.13%) for CMI is below the current ROIC(11.02%), indicating increased profibility in the last year.
| 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 65.35% of its industry peers.
In the last couple of years the Profit Margin of CMI has grown nicely.
CMI's Operating Margin of 11.96% is in line compared to the rest of the industry. CMI outperforms 59.84% of its industry peers.
CMI's Operating Margin has been stable in the last couple of years.
The Gross Margin of CMI (25.96%) is worse than 62.99% 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so CMI is still creating some value.
The number of shares outstanding for CMI has been reduced compared to 1 year ago.
Compared to 5 years ago, CMI has less shares outstanding
Compared to 1 year ago, CMI has a worse debt to assets ratio.
2.2 Solvency
CMI has an Altman-Z score of 3.96. This indicates that CMI is financially healthy and has little risk of bankruptcy at the moment.
CMI's Altman-Z score of 3.96 is fine compared to the rest of the industry. CMI outperforms 66.14% 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.
Looking at the Debt to FCF ratio, with a value of 4.91, CMI is in line with its industry, outperforming 49.61% of the companies in the same industry.
A Debt/Equity ratio of 0.64 indicates that CMI is somewhat dependend on debt financing.
The Debt to Equity ratio of CMI (0.64) is worse than 64.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 4.91 | ||
| Altman-Z | 3.96 |
ROIC/WACC1.15
WACC9.58%
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.
CMI has a Current ratio of 1.64. This is in the lower half of the industry: CMI underperforms 65.35% of its industry peers.
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.
With a Quick ratio value of 1.03, CMI is not doing good in the industry: 60.63% of the companies in the same industry are doing better.
| 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.
The Earnings Per Share has been growing slightly by 7.79% on average over the past years.
CMI shows a decrease in Revenue. In the last year, the revenue decreased by -1.33%.
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
The Earnings Per Share is expected to grow by 13.18% on average over the next years. This is quite good.
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 Y5.14%
EPS Next 2Y9.48%
EPS Next 3Y11.45%
EPS Next 5Y13.18%
Revenue Next Year-2.3%
Revenue Next 2Y1.79%
Revenue Next 3Y3.49%
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 17.03.
Based on the Price/Earnings ratio, CMI is valued a bit cheaper than 79.53% of the companies in the same industry.
When comparing the Price/Earnings ratio of CMI to the average of the S&P500 Index (27.03), we can say CMI is valued slightly cheaper.
CMI is valuated correctly with a Price/Forward Earnings ratio of 15.56.
Based on the Price/Forward Earnings ratio, CMI is valued a bit cheaper than 75.59% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.63, CMI is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.03 | ||
| Fwd PE | 15.56 |
4.2 Price Multiples
70.87% of the companies in the same industry are more expensive than CMI, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, CMI is valued a bit more expensive than 62.20% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.23 | ||
| EV/EBITDA | 11.37 |
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)3.31
PEG (5Y)2.19
EPS Next 2Y9.48%
EPS Next 3Y11.45%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.03%, CMI has a reasonable but not impressive dividend return.
CMI's Dividend Yield is rather good when compared to the industry average which is at 1.87. CMI pays more dividend than 85.83% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, CMI has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.03% |
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.
CMI's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP34.07%
EPS Next 2Y9.48%
EPS Next 3Y11.45%
NYSE:CMI (8/26/2025, 3:15:29 PM)
398.38
+2.28 (+0.58%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners86.41%
Inst Owner Change-1.75%
Ins Owners0.31%
Ins Owner Change6.69%
Market Cap54.89B
Analysts70.77
Price Target414.1 (3.95%)
Short Float %1.28%
Short Ratio2.02
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.03% |
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)11.04%
PT rev (3m)15.63%
EPS NQ rev (1m)-3.04%
EPS NQ rev (3m)-19.05%
EPS NY rev (1m)6.91%
EPS NY rev (3m)6.58%
Revenue NQ rev (1m)-3.32%
Revenue NQ rev (3m)-8.96%
Revenue NY rev (1m)-0.12%
Revenue NY rev (3m)-0.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.03 | ||
| Fwd PE | 15.56 | ||
| P/S | 1.63 | ||
| P/FCF | 33.23 | ||
| P/OCF | 19.3 | ||
| P/B | 4.66 | ||
| P/tB | 7.89 | ||
| EV/EBITDA | 11.37 |
EPS(TTM)23.39
EY5.87%
EPS(NY)25.6
Fwd EY6.43%
FCF(TTM)11.99
FCFY3.01%
OCF(TTM)20.64
OCFY5.18%
SpS244.72
BVpS85.56
TBVpS50.52
PEG (NY)3.31
PEG (5Y)2.19
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 | 3.96 |
F-Score5
WACC9.58%
ROIC/WACC1.15
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 Y5.14%
EPS Next 2Y9.48%
EPS Next 3Y11.45%
EPS Next 5Y13.18%
Revenue 1Y (TTM)-1.33%
Revenue growth 3Y12.39%
Revenue growth 5Y7.67%
Sales Q2Q%-1.74%
Revenue Next Year-2.3%
Revenue Next 2Y1.79%
Revenue Next 3Y3.49%
Revenue Next 5Y6.35%
EBIT growth 1Y22.51%
EBIT growth 3Y18.42%
EBIT growth 5Y7.91%
EBIT Next Year37.52%
EBIT Next 3Y15.58%
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%