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Cummins

NYSE:CMI
Snowflake Description

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

The Snowflake is generated from 30 checks in 5 different areas, read more below.
CMI
NYSE
$25B
Market Cap
  1. Home
  2. US
  3. Capital Goods
Company description

Cummins Inc. designs, manufactures, distributes, and services diesel and natural gas engines, and powertrain-related component products worldwide. The last earnings update was 37 days ago. More info.


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CMI Share Price and Events
7 Day Returns
0.5%
NYSE:CMI
1%
US Machinery
1.2%
US Market
1 Year Returns
-2.3%
NYSE:CMI
-6.1%
US Machinery
3%
US Market
CMI Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Cummins (CMI) 0.5% 1.5% 21.3% -2.3% 46.4% 9.6%
US Machinery 1% 0.6% 17.2% -6.1% 49.1% 28.1%
US Market 1.2% 2.1% 14.6% 3% 39% 43.5%
1 Year Return vs Industry and Market
  • CMI outperformed the Machinery industry which returned -6.1% over the past year.
  • CMI underperformed the Market in United States of America which returned 3% over the past year.
Price Volatility
CMI
Industry
5yr Volatility vs Market

Value

 Is Cummins undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Cummins to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Cummins.

NYSE:CMI Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 24 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 9.3%
Perpetual Growth Rate 10-Year US Government Bond Rate 2.7%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for NYSE:CMI
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year US Govt Bond Rate 2.7%
Equity Risk Premium S&P Global 6%
Machinery Unlevered Beta Simply Wall St/ S&P Global 1.06
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 1.061 (1 + (1- 21%) (10%))
1.097
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
1.1
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 2.73% + (1.097 * 5.96%)
9.27%

Discounted Cash Flow Calculation for NYSE:CMI using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Cummins is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

NYSE:CMI DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (USD, Millions) Source Present Value
Discounted (@ 9.27%)
2019 2,177.23 Analyst x8 1,992.57
2020 2,195.10 Analyst x9 1,838.54
2021 2,349.75 Analyst x4 1,801.16
2022 2,445.00 Analyst x1 1,715.21
2023 2,533.07 Est @ 3.6% 1,626.28
2024 2,617.68 Est @ 3.34% 1,538.07
2025 2,700.33 Est @ 3.16% 1,452.06
2026 2,782.13 Est @ 3.03% 1,369.16
2027 2,863.90 Est @ 2.94% 1,289.87
2028 2,946.29 Est @ 2.88% 1,214.43
Present value of next 10 years cash flows $15,837.37
NYSE:CMI DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2028 × (1 + g) ÷ (Discount Rate – g)
= $2,946.29 × (1 + 2.73%) ÷ (9.27% – 2.73%)
$46,299.33
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= $46,299.33 ÷ (1 + 9.27%)10
$19,084.16
NYSE:CMI Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= $15,837.37 + $19,084.16
$34,921.53
Equity Value per Share
(USD)
= Total value / Shares Outstanding
= $34,921.53 / 156.94
$222.52
NYSE:CMI Discount to Share Price
Calculation Result
Value per share (USD) From above. $222.52
Current discount Discount to share price of $157.76
= -1 x ($157.76 - $222.52) / $222.52
29.1%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

Current Discount
Amount off the current price Cummins is available for.
Intrinsic value
29%
Share price is $157.76 vs Future cash flow value of $222.52
Current Discount Checks
For Cummins to be considered undervalued it must be available for at least 20% below the current price. Less than 40% is even better.
  • Cummins's share price is below the future cash flow value, and at a moderate discount (> 20%).
  • Cummins's share price is below the future cash flow value, but not at a substantial discount (< 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Cummins's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Cummins's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
NYSE:CMI PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2018-12-31) in USD $13.20
NYSE:CMI Share Price ** NYSE (2019-03-20) in USD $157.76
United States of America Machinery Industry PE Ratio Median Figure of 102 Publicly-Listed Machinery Companies 20.82x
United States of America Market PE Ratio Median Figure of 3,058 Publicly-Listed Companies 17.69x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Cummins.

NYSE:CMI PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= NYSE:CMI Share Price ÷ EPS (both in USD)

= 157.76 ÷ 13.20

11.95x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Cummins is good value based on earnings compared to the US Machinery industry average.
  • Cummins is good value based on earnings compared to the United States of America market.
Price based on expected Growth
Does Cummins's expected growth come at a high price?
Raw Data
NYSE:CMI PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 11.95x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 24 Analysts
1%per year
United States of America Machinery Industry PEG Ratio Median Figure of 85 Publicly-Listed Machinery Companies 1.52x
United States of America Market PEG Ratio Median Figure of 2,103 Publicly-Listed Companies 1.48x

*Line of best fit is calculated by linear regression .

NYSE:CMI PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 11.95x ÷ 1%

12.44x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Cummins is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on Cummins's assets?
Raw Data
NYSE:CMI PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2018-12-31) in USD $46.62
NYSE:CMI Share Price * NYSE (2019-03-20) in USD $157.76
United States of America Machinery Industry PB Ratio Median Figure of 129 Publicly-Listed Machinery Companies 2.4x
United States of America Market PB Ratio Median Figure of 5,156 Publicly-Listed Companies 1.89x
NYSE:CMI PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= NYSE:CMI Share Price ÷ Book Value per Share (both in USD)

= 157.76 ÷ 46.62

3.38x

* Primary Listing of Cummins.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Cummins is overvalued based on assets compared to the US Machinery industry average.
X
Value checks
We assess Cummins's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Machinery industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Machinery industry average (and greater than 0)? (1 check)
  5. Cummins has a total score of 3/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

Future Performance

 How is Cummins expected to perform in the next 1 to 3 years based on estimates from 24 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
1%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Cummins expected to grow at an attractive rate?
  • Cummins's earnings growth is positive but not above the low risk savings rate of 2.7%.
Growth vs Market Checks
  • Cummins's earnings growth is positive but not above the United States of America market average.
  • Cummins's revenues are expected to decrease over the next 1-3 years, this is below the United States of America market average.
Annual Growth Rates Comparison
Raw Data
NYSE:CMI Future Growth Rates Data Sources
Data Point Source Value (per year)
NYSE:CMI Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 24 Analysts 1%
NYSE:CMI Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 24 Analysts -0.5%
United States of America Machinery Industry Earnings Growth Rate Market Cap Weighted Average 11.1%
United States of America Machinery Industry Revenue Growth Rate Market Cap Weighted Average 3.6%
United States of America Market Earnings Growth Rate Market Cap Weighted Average 14.3%
United States of America Market Revenue Growth Rate Market Cap Weighted Average 7.1%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
NYSE:CMI Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (2 months ago) See Below
Future Estimates Average of up to 24 Analyst Estimates (S&P Global) See Below
All numbers in USD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
NYSE:CMI Future Estimates Data
Date (Data in USD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2022-12-31 24,092 2,337 1
2021-12-31 23,612 3,203 2,276 8
2020-12-31 23,527 2,819 2,231 23
2019-12-31 24,327 2,853 2,403 24
NYSE:CMI Past Financials Data
Date (Data in USD Millions) Revenue Cash Flow Net Income *
2018-12-31 23,771 2,378 2,141
2018-09-30 23,121 2,194 1,288
2018-07-01 22,463 1,924 1,049
2018-04-01 21,409 1,781 928
2017-12-31 20,428 2,277 999
2017-10-01 19,455 2,096 1,651
2017-07-02 18,357 2,027 1,487
2017-04-02 17,807 2,051 1,469
2016-12-31 17,509 1,939 1,394
2016-10-02 17,772 2,242 1,177
2016-07-03 18,205 2,228 1,268
2016-04-03 18,692 2,153 1,333

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Cummins's earnings are expected to grow by 1% yearly, however this is not considered high growth (20% yearly).
  • Cummins's revenue is expected to decrease over the next 1-3 years, this is not considered high growth.
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
NYSE:CMI Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (2 months ago) See Below
Future Estimates Average of up to 24 Analyst Estimates (S&P Global) See Below

All data from Cummins Company Filings, last reported 2 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NYSE:CMI Future Estimates Data
Date (Data in USD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2022-12-31 16.91 16.91 16.91 1.00
2021-12-31 15.50 17.75 13.82 5.00
2020-12-31 14.82 17.00 12.91 19.00
2019-12-31 15.44 16.00 13.72 18.00
NYSE:CMI Past Financials Data
Date (Data in USD Millions) EPS *
2018-12-31 13.20
2018-09-30 7.86
2018-07-01 6.35
2018-04-01 5.59
2017-12-31 6.00
2017-10-01 9.88
2017-07-02 8.87
2017-04-02 8.75
2016-12-31 8.25
2016-10-02 6.88
2016-07-03 7.32
2016-04-03 7.58

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Cummins is expected to efficiently use shareholders’ funds in the future (Return on Equity greater than 20%).
X
Future performance checks
We assess Cummins's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United States of America market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United States of America market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Cummins has a total score of 1/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has Cummins performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Cummins's growth in the last year to its industry (Machinery).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Cummins's year on year earnings growth rate was negative over the past 5 years, however the most recent earnings are above average.
  • Cummins's 1-year earnings growth exceeds its 5-year average (114.3% vs -3.8%)
  • Cummins's earnings growth has exceeded the US Machinery industry average in the past year (114.3% vs 31%).
Earnings and Revenue History
Cummins's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Cummins Company Filings, last reported 2 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NYSE:CMI Past Revenue, Cash Flow and Net Income Data
Date (Data in USD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2018-12-31 23,771.00 2,141.00 2,377.00 902.00
2018-09-30 23,121.00 1,288.00 2,375.00 864.00
2018-07-01 22,463.00 1,049.00 2,412.00 848.00
2018-04-01 21,409.00 928.00 2,420.00 804.00
2017-12-31 20,428.00 999.00 2,398.00 754.00
2017-10-01 19,455.00 1,651.00 2,283.00 704.00
2017-07-02 18,357.00 1,487.00 2,170.00 648.00
2017-04-02 17,807.00 1,469.00 2,103.00 628.00
2016-12-31 17,509.00 1,394.00 2,051.00 637.00
2016-10-02 17,772.00 1,177.00 2,035.00 655.00
2016-07-03 18,205.00 1,268.00 2,052.00 695.00
2016-04-03 18,692.00 1,333.00 2,065.00 706.00
2015-12-31 19,110.00 1,399.00 2,092.00 735.00
2015-09-27 19,434.00 1,682.00 2,146.00 741.00
2015-06-28 19,704.00 1,725.00 2,145.00 742.00
2015-03-29 19,524.00 1,700.00 2,121.00 755.00
2014-12-31 19,221.00 1,651.00 2,095.00 754.00
2014-09-28 18,719.00 1,639.00 2,000.00 748.00
2014-06-29 18,095.00 1,571.00 1,887.00 723.00
2014-03-30 17,785.00 1,539.00 1,858.00 721.00
2013-12-31 17,301.00 1,483.00 1,817.00 713.00
2013-09-29 17,005.00 1,420.00 1,806.00 703.00
2013-06-30 16,857.00 1,417.00 1,846.00 716.00
2013-03-31 16,784.00 1,472.00 1,849.00 726.00
2012-12-31 17,334.00 1,645.00 1,788.00 728.00
2012-09-30 17,963.00 1,824.00 1,914.00 733.00
2012-07-01 18,471.00 1,924.00 1,947.00 711.00
2012-04-01 18,660.00 1,960.00 1,923.00 681.00

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Cummins has efficiently used shareholders’ funds last year (Return on Equity greater than 20%).
  • Cummins used its assets more efficiently than the US Machinery industry average last year based on Return on Assets.
  • Cummins has improved its use of capital last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess Cummins's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Machinery industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Cummins has a total score of 5/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is Cummins's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Cummins's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Cummins is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Cummins's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of Cummins's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • High level of physical assets or inventory.
  • Debt is covered by short term assets, assets are 4x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Cummins Company Filings, last reported 2 months ago.

NYSE:CMI Past Debt and Equity Data
Date (Data in USD Millions) Total Equity Total Debt Cash & Short Term Investments
2018-12-31 8,259.00 2,476.00 1,525.00
2018-09-30 8,060.00 2,465.00 1,407.00
2018-07-01 8,194.00 2,462.00 1,532.00
2018-04-01 8,296.00 2,277.00 1,387.00
2017-12-31 8,164.00 2,006.00 1,567.00
2017-10-01 8,561.00 2,255.00 1,444.00
2017-07-02 7,822.00 1,797.00 1,467.00
2017-04-02 7,476.00 1,945.00 1,467.00
2016-12-31 7,174.00 1,856.00 1,380.00
2016-10-02 7,264.00 1,949.00 1,501.00
2016-07-03 7,195.00 1,871.00 1,280.00
2016-04-03 7,260.00 1,830.00 1,274.00
2015-12-31 7,750.00 1,639.00 1,811.00
2015-09-27 8,081.00 1,653.00 1,723.00
2015-06-28 8,214.00 1,677.00 1,849.00
2015-03-29 8,069.00 1,706.00 2,112.00
2014-12-31 8,093.00 1,686.00 2,394.00
2014-09-28 8,097.00 1,689.00 2,381.00
2014-06-29 8,158.00 1,690.00 2,377.00
2014-03-30 7,734.00 1,693.00 2,307.00
2013-12-31 7,870.00 1,740.00 2,849.00
2013-09-29 7,464.00 1,793.00 2,661.00
2013-06-30 7,093.00 837.00 1,587.00
2013-03-31 7,045.00 803.00 1,679.00
2012-12-31 6,974.00 775.00 1,616.00
2012-09-30 6,834.00 801.00 1,272.00
2012-07-01 6,437.00 794.00 1,406.00
2012-04-01 6,358.00 683.00 1,569.00
  • Cummins's level of debt (30%) compared to net worth is satisfactory (less than 40%).
  • The level of debt compared to net worth has increased over the past 5 years (22.1% vs 30% today).
  • Debt is well covered by operating cash flow (96%, greater than 20% of total debt).
  • Interest payments on debt are well covered by earnings (EBIT is 32.5x coverage).
X
Financial health checks
We assess Cummins's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Cummins has a total score of 5/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

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

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
2.89%
Current annual income from Cummins dividends. Estimated to be 3.01% next year.
If you bought $2,000 of Cummins shares you are expected to receive $58 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Cummins's pays a higher dividend yield than the bottom 25% of dividend payers in United States of America (1.45%).
  • Cummins's dividend is below the markets top 25% of dividend payers in United States of America (3.64%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
NYSE:CMI Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 24 Analyst Estimates (S&P Global) See Below
United States of America Machinery Industry Average Dividend Yield Market Cap Weighted Average of 78 Stocks 2%
United States of America Market Average Dividend Yield Market Cap Weighted Average of 2004 Stocks 2.5%
United States of America Minimum Threshold Dividend Yield 10th Percentile 0.8%
United States of America Bottom 25% Dividend Yield 25th Percentile 1.4%
United States of America Top 25% Dividend Yield 75th Percentile 3.6%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

NYSE:CMI Future Dividends Estimate Data
Date (Data in $) Dividend per Share (annual) Avg. No. Analysts
2022-12-31
2021-12-31 4.87 6.00
2020-12-31 4.83 14.00
2019-12-31 4.63 14.00
NYSE:CMI Past Annualized Dividends Data
Date (Data in $) Dividend per share (annual) Avg. Yield (%)
2019-02-12 4.560 2.934
2018-10-09 4.560 3.235
2018-07-10 4.560 3.203
2018-05-08 4.320 3.058
2018-02-13 4.320 2.687
2017-10-10 4.320 2.479
2017-07-11 4.320 2.659
2017-05-09 4.100 2.578
2017-02-14 4.100 2.711
2016-10-11 4.100 2.986
2016-07-12 4.100 3.338
2016-05-10 3.900 3.444
2016-02-09 3.900 3.653
2015-10-13 3.900 4.128
2015-07-14 3.900 3.236
2015-05-12 3.120 2.297
2015-02-09 3.120 2.249
2014-10-14 3.120 2.184
2014-07-08 3.120 2.208
2014-05-13 2.500 1.619
2014-02-11 2.500 1.719
2013-10-15 2.500 1.880
2013-07-09 2.500 1.994
2013-05-14 2.000 1.747
2013-02-12 2.000 1.759
2012-10-16 2.000 1.910
2012-07-10 2.000 2.119
2012-02-14 1.600 1.482
2011-10-17 1.600 1.639
2011-07-12 1.600 1.720
2011-05-10 1.050 1.028
2011-02-08 1.050 0.981
2010-10-19 1.050 1.027
2010-07-13 1.050 1.280
2010-05-13 0.700 1.014
2010-02-09 0.700 1.115
2009-10-20 0.700 1.472
2009-07-14 0.700 1.576
2009-03-23 0.700 2.222

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Dividends per share have been stable in the past 10 years.
  • Dividends per share have increased over the past 10 years.
Current Payout to shareholders
What portion of Cummins's earnings are paid to the shareholders as a dividend.
  • Dividends paid are well covered by earnings (3x coverage).
Future Payout to shareholders
  • Dividends after 3 years are expected to be well covered by earnings (3.2x coverage).
X
Income/ dividend checks
We assess Cummins's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.8%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Cummins afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Cummins has a total score of 5/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

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

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Tom Linebarger
COMPENSATION $16,387,661
AGE 55
TENURE AS CEO 7.2 years
CEO Bio

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 been the Chief Executive Officer of Cummins Inc. since January 1, 2012. Mr. Linebarger served as the President and Chief Operating Officer at Cummins Inc. since August 1, 2008 to 2011. He served as an Executive Vice President at Cummins and President at Cummins Power Generation Inc. from May 2005 to 2008. He served as Vice President of Cummins Inc. since 2003. Mr. Linebarger served as Executive Vice President and President of Power Generation Business at Cummins Inc. from 2003 to 2008, Vice President and Chief Financial Officer from 2000 to 2003 and Vice President of Supply Chain Management from 1998 to 2000. Mr. Linebarger served as Managing Director at Holset Engineering Co. Ltd. from 1997 to 1998, Senior Manager of Engineering Operations and Technical Center Leader of Holset from 1996 to 1997, an Assistant to Group Vice President of Worldwide Operations from 1992 to 1996. He served as Program Manager of Advance Fuel Systems. He served as an Assistant to Plant Manager of CMEP (summer intern) since 1992. He served as an Investment Manager of Prudential Asset Manager Asia Ltd. at Prudential Investment Corporation from 1986 to 1991. He serves as Chairman of Cummins Norway AS. He has been Chairman of Cummins Inc. since January 1, 2012. He serves as a Director of Cummins Inc. of Cummins Power Systems, LLC since 2009. He serves as Director of Indiana Economic Development Corp. and Energy Systems Network. He has been an Independent Director of Harley-Davidson, Inc. since July 30, 2008. He served as Director of Pactiv Corp. from November 28, 2005 to November 16, 2010. Mr. Linebarger holds Masters of Business Administration in Business from Stanford Graduate School of Business in 1993 and He holds Master in Science in Manufacturing Systems Engineering from Stanford Graduate School of Business in 1993. He holds Bachelors of Science in Mechanical Engineering from Stanford University in 1986 and Bachelors in Arts in Economics from Claremont McKenna College in 1986. He has Master's Degrees in business and manufacturing systems engineering from the Stanford Graduate School of Business and undergraduate degrees are in Mechanical Engineering and Economics.

CEO Compensation
  • Tom's compensation has increased by more than 20% in the past year.
  • Tom's remuneration is higher than average for companies of similar size in United States of America.
Management Team Tenure

Average tenure and age of the Cummins management team in years:

7.2
Average Tenure
55
Average Age
  • The average tenure for the Cummins management team is over 5 years, this suggests they are a seasoned and experienced team.
Management Team

Tom Linebarger

TITLE
Chairman & CEO
COMPENSATION
$16M
AGE
55
TENURE
7.2 yrs

Rich Freeland

TITLE
President
COMPENSATION
$6M
AGE
61
TENURE
4.7 yrs

Pat Ward

TITLE
VP & CFO
COMPENSATION
$5M
AGE
54
TENURE
10.8 yrs

Marya Rose

TITLE
VP & Chief Administrative Officer
COMPENSATION
$4M
AGE
55
TENURE
8.2 yrs

Tony Satterthwaite

TITLE
VP & President of Distribution Business
COMPENSATION
$4M
AGE
57

Jennifer Rumsey

TITLE
VP & CTO
AGE
44
TENURE
3.4 yrs

Sherry Aaholm

TITLE
VP & Chief Information Officer
AGE
55
TENURE
5.8 yrs

James Hopkins

TITLE
Executive Director of Investor Relations

Sharon Barner

TITLE
VP & General Counsel
AGE
60
TENURE
7.2 yrs

Mark Sifferlen

TITLE
VP of Ethics & Compliance and Secretary
Board of Directors Tenure

Average tenure and age of the Cummins board of directors in years:

10.8
Average Tenure
62.5
Average Age
  • The average tenure for the Cummins board of directors is over 10 years, this suggests they are a seasoned and experienced board.
Board of Directors

Tom Linebarger

TITLE
Chairman & CEO
COMPENSATION
$16M
AGE
55
TENURE
7.2 yrs

Rich Freeland

TITLE
President
COMPENSATION
$6M
AGE
61
TENURE
1.7 yrs

Anant Talaulicar

TITLE
Vice President
COMPENSATION
$4M
AGE
56
TENURE
16.2 yrs

Alexis Herman

TITLE
Lead Director
COMPENSATION
$301K
AGE
70
TENURE
18.2 yrs

Georgia Nelson

TITLE
Director
COMPENSATION
$283K
AGE
68
TENURE
14.7 yrs

Robert Herdman

TITLE
Director
COMPENSATION
$272K
AGE
69
TENURE
11.1 yrs

Steve Dobbs

TITLE
Director
COMPENSATION
$267K
AGE
61
TENURE
8.4 yrs

Tom Lynch

TITLE
Director
COMPENSATION
$267K
AGE
63
TENURE
3.8 yrs

Will Miller

TITLE
Director
COMPENSATION
$316K
AGE
62
TENURE
30.1 yrs

Bob Bernhard

TITLE
Director
COMPENSATION
$257K
AGE
65
TENURE
10.4 yrs
Who owns this company?
Recent Insider Trading
  • Cummins insiders have only sold shares in the past 3 months.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price ($) Value ($)
12. Feb 19 Sell Alexis Herman Individual 12. Feb 19 12. Feb 19 -423 $150.12 $-63,499
16. Nov 18 Sell Franklin Chang Diaz Individual 15. Nov 18 15. Nov 18 -595 $147.86 $-87,974
06. Nov 18 Sell Alexis Herman Individual 05. Nov 18 05. Nov 18 -775 $143.64 $-111,321
06. Aug 18 Sell Alexis Herman Individual 03. Aug 18 03. Aug 18 -735 $139.90 $-102,827
X
Management checks
We assess Cummins's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Cummins has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

News

Simply Wall St News

Cummins Inc. (NYSE:CMI) Is An Attractive Dividend Stock, Here's Why

The company currently pays out a dividend yield of 2.9% to shareholders, making it a relatively attractive dividend stock. … Check out our latest analysis for Cummins … 5 questions to ask before buying a dividend stock

Simply Wall St -

Has Cummins Inc. (NYSE:CMI) Got Enough Cash?

Common characteristics for these big stocks are their strong balance sheet and high liquidity, which means there's plenty of stocks available to the public for trading. … These companies are resilient in times of low liquidity and are not as strongly impacted by interest rate hikes as companies with lots of debt. … Using the most recent data for CMI, I will determine its financial status based on its solvency and liquidity, and assess whether the stock is a safe investment.

Simply Wall St -

Cummins Inc. (NYSE:CMI): What We Can Expect From This Growth Stock

the consensus outlook from analysts appear fairly confident, … as a 12% increase in profits is expected in the upcoming year, … the past 5-year average growth rate of -3.8%.

Simply Wall St -

Income Investors Should Know The Cummins Inc. (NYSE:CMI) Ex-Dividend Date

To qualify for the dividend check of US$1.14 per share, investors must have owned the shares prior to 21 February 2019, which is the last day the company's management will finalize their list of shareholders to which they will send dividend payments. … Well, keep on reading because today, I'm going to look at the latest data and analyze the stock and its dividend property in further detail. … Will the company be able to keep paying dividend based on the future earnings growth

Simply Wall St -

Should You Investigate Cummins Inc. (NYSE:CMI) At US$149?

saw a decent share price growth in the teens level on the NYSE over the last few months. … With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price … However, could the stock still be trading at a relatively cheap price?

Simply Wall St -

Brief Commentary On Cummins Inc.'s (NYSE:CMI) Fundamentals

Building up an investment case requires looking at a stock holistically. … Today I've chosen to put the spotlight on Cummins Inc. … that has been able to sustain great financial health over the past

Simply Wall St -

Should You Be Worried About Insider Transactions At Cummins Inc. (NYSE:CMI)?

We often see insiders buying up shares in companies that perform well over the long term. … So shareholders might well want to know whether insiders have been buying or selling shares in Cummins Inc. … But logic dictates you should pay some attention to whether insiders are buying or selling shares.

Simply Wall St -

Here's What Cummins Inc.'s (NYSE:CMI) ROCE Can Tell Us

Specifically, we're going to calculate its Return On Capital Employed (ROCE), in the hopes of getting some insight into the business. … Understanding Return On Capital Employed (ROCE). … ROCE measures the amount of pre-tax profits a company can generate from the capital employed in its business.

Simply Wall St -

What Cummins Inc.'s (NYSE:CMI) ROE Can Tell Us

Our data shows Cummins has a return on equity of 16% for the last year. … One way to conceptualize this, is that for each $1 of shareholders' equity it has, the company made $0.16 in profit. … Return on Equity = Net Profit ÷ Shareholders' Equity

Simply Wall St -

Does Cummins Inc (NYSE:CMI) Have A Place In Your Portfolio?

Cummins Inc (NYSE:CMI) has pleased shareholders over the past 10 years, by paying out dividends. … Does Cummins tick all the boxes of a great dividend stock? … View our latest analysis for Cummins

Simply Wall St -

Company Info

Description

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, Components, Power Systems, and Electrified Power. The Engine segment manufactures and markets a range of diesel and natural gas powered engines under the Cummins and other customer brands for the heavy-and medium-duty truck, bus, recreational vehicle, light-duty automotive, construction, mining, marine, rail, oil and gas, defense, and agricultural markets. It also offers new parts and services, as well as remanufactured parts and engines. The Distribution segment distributes parts, engines, and power generation products; and provides service solutions, such as maintenance contracts, engineering services, and integrated products. The Components segment offers emission solutions; and turbochargers for light-duty, mid-range, heavy-duty, and high-horsepower diesel markets. It also provides air and fuel filters, fuel water separators, lube and hydraulic filters, coolants, fuel additives, and other filtration systems; and fuel systems for heavy-duty on-highway diesel engine applications, as well as remanufactures fuel systems. The Power Systems segment offers back-up and prime power generators, controls, paralleling systems, and transfer switches, as well as A/C generator/alternator products under the Stamford, AVK, and Markon brands. The Electrified Power segment provides electric and hybrid powertrain systems; and battery modules, packs, and systems for commercial, industrial, and material handling applications. The company sells its products to original equipment manufacturers, dealers/distributors, and end users. The company was formerly known as Cummins Engine Company and changed its name to Cummins Inc. in 2001. Cummins Inc. was founded in 1919 and is headquartered in Columbus, Indiana.

Details
Name: Cummins Inc.
CMI
Exchange: NYSE
Founded: 1919
$24,758,854,400
156,940,000
Website: http://www.cummins.com
Address: Cummins Inc.
500 Jackson Street,
Box 3005,
Columbus,
Indiana, 47202,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NYSE CMI Common Stock New York Stock Exchange US USD 02. Jan 1968
DB CUM Common Stock Deutsche Boerse AG DE EUR 02. Jan 1968
LSE 0I58 Common Stock London Stock Exchange GB USD 02. Jan 1968
BMV CMI * Common Stock Bolsa Mexicana de Valores MX MXN 02. Jan 1968
Number of employees
Current staff
Staff numbers
62,610
Cummins employees.
Industry
Construction Machinery and Heavy Trucks
Capital Goods
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/03/20 23:35
End of day share price update: 2019/03/20 00:00
Last estimates confirmation: 2019/03/20
Last earnings filing: 2019/02/11
Last earnings reported: 2018/12/31
Last annual earnings reported: 2018/12/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

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.