NYSE:CMI

Stock Analysis Report

Executive Summary

Cummins Inc. designs, manufactures, distributes, and services diesel and natural gas engines, and powertrain-related component products worldwide.

Snowflake

Fundamentals

Outstanding track record with excellent balance sheet and pays a dividend.


Similar Companies

Share Price & News

How has Cummins's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CMI has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

4.1%

CMI

0.1%

US Machinery

0.3%

US Market


1 Year Return

29.1%

CMI

17.9%

US Machinery

12.5%

US Market

Return vs Industry: CMI exceeded the US Machinery industry which returned 17.9% over the past year.

Return vs Market: CMI exceeded the US Market which returned 12.5% over the past year.


Shareholder returns

CMIIndustryMarket
7 Day4.1%0.1%0.3%
30 Day14.5%10.5%4.1%
90 Day23.4%16.0%5.6%
1 Year33.2%29.1%20.1%17.9%15.0%12.5%
3 Year51.0%38.4%48.2%38.8%49.1%39.4%
5 Year49.3%28.8%62.3%42.6%62.8%44.7%

Price Volatility Vs. Market

How volatile is Cummins's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Cummins undervalued compared to its fair value and its price relative to the market?

11.55x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: CMI ($186.44) is trading above our estimate of fair value ($177.77)

Significantly Below Fair Value: CMI is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: CMI is good value based on its PE Ratio (11.6x) compared to the Machinery industry average (22.9x).

PE vs Market: CMI is good value based on its PE Ratio (11.6x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: CMI's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: CMI is overvalued based on its PB Ratio (3.7x) compared to the US Machinery industry average (2.5x).


Next Steps

Future Growth

How is Cummins forecast to perform in the next 1 to 3 years based on estimates from 21 analysts?

-2.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CMI's earnings are forecast to decline over the next 3 years (-2.5% per year).

Earnings vs Market: CMI's earnings are forecast to decline over the next 3 years (-2.5% per year).

High Growth Earnings: CMI's earnings are forecast to decline over the next 3 years.

Revenue vs Market: CMI's revenue is expected to decline over the next 3 years (-1.3% per year).

High Growth Revenue: CMI's revenue is forecast to decline over the next 3 years (-1.3% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CMI's Return on Equity is forecast to be high in 3 years time (25.6%)


Next Steps

Past Performance

How has Cummins performed over the past 5 years?

6.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CMI has high quality earnings.

Growing Profit Margin: CMI's current net profit margins (10.5%) are higher than last year (5.6%).


Past Earnings Growth Analysis

Earnings Trend: CMI's earnings have grown by 6.9% per year over the past 5 years.

Accelerating Growth: CMI's earnings growth over the past year (97.5%) exceeds its 5-year average (6.9% per year).

Earnings vs Industry: CMI earnings growth over the past year (97.5%) exceeded the Machinery industry 11.4%.


Return on Equity

High ROE: CMI's Return on Equity (29.5%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Cummins's financial position?


Financial Position Analysis

Short Term Liabilities: CMI's short term assets ($10.2B) exceeds its short term liabilities ($6.7B)

Long Term Liabilities: CMI's short term assets (10.2B) exceeds its long term liabilities (4.9B)


Debt to Equity History and Analysis

Debt Level: CMI's debt to equity ratio (29%) is considered satisfactory

Reducing Debt: CMI's debt to equity ratio has increased from 20.9% to 29% over the past 5 years.

Debt Coverage: CMI's debt is well covered by operating cash flow (131.3%).

Interest Coverage: CMI's interest payments on its debt are well covered by EBIT (41.2x coverage).


Balance Sheet

Inventory Level: CMI has a high level of physical assets or inventory.

Debt Coverage by Assets: CMI's debt is covered by short term assets (assets are 4x debt).


Next Steps

Dividend

What is Cummins's current dividend yield, its reliability and sustainability?

2.81%

Current Dividend Yield


Dividend Yield vs Market

company2.8%marketbottom25%1.4%markettop25%3.7%industryaverage1.9%forecastin3Years2.7%

Current dividend yield vs market & industry

Notable Dividend: CMI's dividend (2.81%) is higher than the bottom 25% of dividend payers in the US market (1.42%).

High Dividend: CMI's dividend (2.81%) is low compared to the top 25% of dividend payers in the US market (3.67%).


Stability and Growth of Payments

Stable Dividend: CMI's dividends per share have been stable in the past 10 years.

Growing Dividend: CMI's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (29.3%), CMI's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CMI's dividends in 3 years are forecast to be well covered by earnings (33.7% payout ratio).


Next Steps

Management

What is the CEO of Cummins's salary, the management and board of directors tenure and is there insider trading?

7.1yrs

Average management tenure


CEO

Tom Linebarger (56yo)

7.8yrs

Tenure

US$17,291,978

Compensation

Mr. N. Thomas Linebarger, also known as Tom, serves as Chief Executive Officer at Cummins Norway AS. Mr. Linebarger serves as Chief Executive Officer of Cummins Inc. at Cummins Power Systems, LLC. He has b ...


CEO Compensation Analysis

Compensation vs Market: Tom's total compensation ($USD17.29M) is above average for companies of similar size in the US market ($USD11.12M).

Compensation vs Earnings: Tom's compensation has been consistent with company performance over the past year.


Management Age and Tenure

7.1yrs

Average Tenure

56yo

Average Age

Experienced Management: CMI's management team is seasoned and experienced (7.1 years average tenure).


Board Age and Tenure

11.4yrs

Average Tenure

65yo

Average Age

Experienced Board: CMI's board of directors are seasoned and experienced ( 11.4 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$63,49912 Feb 19
Alexis Herman
EntityIndividual
Role
Lead Director
Lead Director
Shares423
Max PriceUS$150.12
SellUS$87,97416 Nov 18
Franklin Chang Diaz
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares595
Max PriceUS$147.86

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Tom Linebarger (56yo)

    Chairman & CEO

    • Tenure: 7.8yrs
    • Compensation: US$17.29m
  • Tony Satterthwaite (58yo)

    President & COO

    • Tenure: 0.08yrs
    • Compensation: US$3.00m
  • Marya Rose (56yo)

    VP & Chief Administrative Officer

    • Tenure: 8.8yrs
    • Compensation: US$3.37m
  • Sharon Barner (61yo)

    VP & General Counsel

    • Tenure: 7.8yrs
  • Mark Smith (51yo)

    CFO & VP

    • Tenure: 0.7yrs
  • Carole Casto

    Executive Director of Corporate Communications

    • Tenure: 7.8yrs
  • Mark Sifferlen

    VP of Ethics & Compliance and Secretary

    • Tenure: 0yrs
  • Sherry Aaholm (56yo)

    VP & Chief Information Officer

    • Tenure: 6.4yrs
  • Walter Fier

    VP & CTO

    • Tenure: 0.08yrs
  • James Hopkins

    Executive Director of Investor Relations

    • Tenure: 0yrs

Board Members

  • Tom Lynch (64yo)

    Independent Director

    • Tenure: 4.5yrs
    • Compensation: US$289.89k
  • Tom Linebarger (56yo)

    Chairman & CEO

    • Tenure: 7.8yrs
    • Compensation: US$17.29m
  • Will Miller (63yo)

    Independent Director

    • Tenure: 30.8yrs
    • Compensation: US$332.09k
  • Georgia Nelson (69yo)

    Independent Director

    • Tenure: 15.3yrs
    • Compensation: US$304.94k
  • Alexis Herman (71yo)

    Lead Director

    • Tenure: 18.8yrs
    • Compensation: US$324.89k
  • Steve Dobbs (62yo)

    Independent Director

    • Tenure: 9.1yrs
    • Compensation: US$296.89k
  • Robert Herdman (70yo)

    Independent Director

    • Tenure: 11.8yrs
    • Compensation: US$295.89k
  • Anant Talaulicar (58yo)

    Vice President

    • Tenure: 16.8yrs
    • Compensation: US$4.48m
  • Bob Bernhard (66yo)

    Independent Director

    • Tenure: 11.1yrs
    • Compensation: US$274.89k
  • Franklin Chang Diaz (69yo)

    Independent Director

    • Tenure: 9.9yrs
    • Compensation: US$274.89k

Company Information

Cummins Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Cummins Inc.
  • Ticker: CMI
  • Exchange: NYSE
  • Founded: 1919
  • Industry: Construction Machinery and Heavy Trucks
  • Sector: Capital Goods
  • Market Cap: US$28.209b
  • Shares outstanding: 151.30m
  • Website: https://www.cummins.com

Number of Employees


Location

  • Cummins Inc.
  • 500 Jackson Street
  • Box 3005
  • Columbus
  • Indiana
  • 47202
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CMINYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
CUMDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
CMI *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968
0I58LSE (London Stock Exchange)YesCommon StockGBUSDJan 1968

Biography

Cummins Inc. designs, manufactures, distributes, and services diesel and natural gas engines, and powertrain-related component products worldwide. It operates in five segments: Engine, Distribution, Compon ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/11 23:33
End of Day Share Price2019/11/11 00:00
Earnings2019/09/29
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.