CUMMINS INC (CMI) Stock Fundamental Analysis
USA - NYSE:CMI - US2310211063 - Common Stock
426.39 USD
+14.61 (+3.55%)
426.39 USD
0 (0%)
Overall CMI gets a fundamental rating of 5 out of 10. We evaluated CMI against 128 industry peers in the Machinery industry. CMI has an excellent profitability rating, but 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.
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 8.58%. This is in the better half of the industry: CMI outperforms 73.44% of its industry peers.
The Return On Equity of CMI (24.95%) is better than 91.41% of its industry peers.
CMI has a better Return On Invested Capital (11.02%) than 77.34% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CMI is in line with the industry average of 10.02%.
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
With a decent Profit Margin value of 8.72%, CMI is doing good in the industry, outperforming 67.19% of the companies in the same industry.
CMI's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 11.96%, CMI is doing good in the industry, outperforming 60.94% 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: 62.50% 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 4.02 indicates that CMI is not in any danger for bankruptcy at the moment.
CMI has a better Altman-Z score (4.02) than 67.97% 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.
CMI has a Debt to FCF ratio (4.91) which is in line with its industry peers.
A Debt/Equity ratio of 0.64 indicates that CMI is somewhat dependend on debt financing.
CMI has a worse Debt to Equity ratio (0.64) than 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 4.91 | ||
| Altman-Z | 4.02 |
ROIC/WACC1.14
WACC9.65%
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.
The Current ratio of CMI (1.64) is worse than 65.63% of its industry peers.
A Quick Ratio of 1.03 indicates that CMI should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.03, CMI is not doing good in the industry: 60.94% 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
The Earnings Per Share has grown by an impressive 23.63% over the past year.
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 -1.33% 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)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
Based on estimates for the next years, CMI will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.18% on average per year.
CMI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.35% yearly.
EPS Next Y5.14%
EPS Next 2Y9.48%
EPS Next 3Y11.45%
EPS Next 5Y13.18%
Revenue Next Year-2.37%
Revenue Next 2Y1.75%
Revenue Next 3Y3.74%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 18.23 indicates a rather expensive valuation of CMI.
Based on the Price/Earnings ratio, CMI is valued a bit cheaper than 75.00% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.41, CMI is valued a bit cheaper.
CMI is valuated correctly with a Price/Forward Earnings ratio of 16.65.
Based on the Price/Forward Earnings ratio, CMI is valued a bit cheaper than 73.44% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of CMI to the average of the S&P500 Index (22.88), we can say CMI is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.23 | ||
| Fwd PE | 16.65 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CMI indicates a somewhat cheap valuation: CMI is cheaper than 68.75% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, CMI is valued a bit more expensive than the industry average as 60.94% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 35.56 | ||
| EV/EBITDA | 11.79 |
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.
PEG (NY)3.55
PEG (5Y)2.34
EPS Next 2Y9.48%
EPS Next 3Y11.45%
5. Dividend
5.1 Amount
CMI has a Yearly Dividend Yield of 1.95%.
CMI's Dividend Yield is rather good when compared to the industry average which is at 1.74. CMI pays more dividend than 85.94% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, CMI has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.95% |
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 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.
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%
426.39
+14.61 (+3.55%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners86.41%
Inst Owner Change-1.74%
Ins Owners0.31%
Ins Owner Change0.17%
Market Cap58.75B
Analysts71.85
Price Target414.1 (-2.88%)
Short Float %1.09%
Short Ratio1.69
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.95% |
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)12.26%
PT rev (3m)14.57%
EPS NQ rev (1m)-0.83%
EPS NQ rev (3m)-2.52%
EPS NY rev (1m)6.91%
EPS NY rev (3m)6.58%
Revenue NQ rev (1m)-0.17%
Revenue NQ rev (3m)-3.24%
Revenue NY rev (1m)-0.32%
Revenue NY rev (3m)-0.14%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.23 | ||
| Fwd PE | 16.65 | ||
| P/S | 1.74 | ||
| P/FCF | 35.56 | ||
| P/OCF | 20.66 | ||
| P/B | 4.98 | ||
| P/tB | 8.44 | ||
| EV/EBITDA | 11.79 |
EPS(TTM)23.39
EY5.49%
EPS(NY)25.6
Fwd EY6%
FCF(TTM)11.99
FCFY2.81%
OCF(TTM)20.64
OCFY4.84%
SpS244.72
BVpS85.56
TBVpS50.52
PEG (NY)3.55
PEG (5Y)2.34
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 | 4.02 |
F-Score5
WACC9.65%
ROIC/WACC1.14
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-2.37%
Revenue Next 2Y1.75%
Revenue Next 3Y3.74%
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%