Cummins (NYSE:CMI) - Share price, News & Analysis

CMI fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	2/6
Past Performance	3/6
Financial Health	5/6
Dividends	5/6

CMI Stock Overview

Cummins Inc. designs, manufactures, distributes, and services diesel and natural gas engines, electric and hybrid powertrains, and related components worldwide.

Rewards

Trading at 37.5% below our estimate of its fair value

Earnings are forecast to grow 4.66% per year

Earnings have grown 9% per year over the past 5 years

Pays a reliable dividend of 2.86%

Risk Analysis

Significant insider selling over the past 3 months

Cummins Competitors

PACCAR

NasdaqGS:PCAR

US$29.1b

Oshkosh

NYSE:OSK

US$5.8b

Allison Transmission Holdings

NYSE:ALSN

US$3.7b

Terex

NYSE:TEX

US$2.3b

Price History & Performance

Summary of all time highs, changes and price drops for Cummins
Historical stock prices
Current Share Price	US$202.69
52 Week High	US$270.84
52 Week Low	US$187.72
Beta	1.03
1 Month Change	3.45%
3 Month Change	-8.85%
1 Year Change	-23.89%
3 Year Change	25.75%
5 Year Change	30.44%
Change since IPO	3,048.58%

Recent News & Updates

May 03

Oh My, Oh My, Cummins' Dividend Is Attractive

We can finally ignore the yield vs. growth debate as Cummins offers both. The company has a decent dividend yield of 3.0% and very satisfying dividend growth thanks to a stellar business model. Valuation-wise, investors benefit from a steep drawdown as investors have priced in lower economic growth. The company just reported fantastic earnings as it is in a good spot to offset input inflation, thanks to strong demand and higher prices.

Apr 29

Are Investors Undervaluing Cummins Inc. (NYSE:CMI) By 43%?

How far off is Cummins Inc. ( NYSE:CMI ) from its intrinsic value? Using the most recent financial data, we'll take a...

Shareholder Returns

	CMI	US Machinery	US Market
7D	-0.01%	-0.4%	0.7%
1Y	-23.9%	-18.2%	-10.8%

Return vs Industry: CMI underperformed the US Machinery industry which returned -18.2% over the past year.

Return vs Market: CMI underperformed the US Market which returned -10.4% over the past year.

Price Volatility

Is CMI's price volatile compared to industry and market?
CMI volatility
CMI Average Weekly Movement	4.8%
Machinery Industry Average Movement	5.6%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	2.9%

Stable Share Price: CMI is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: CMI's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1919	59,900	Tom Linebarger	https://www.cummins.com

Cummins Inc. designs, manufactures, distributes, and services diesel and natural gas engines, electric and hybrid powertrains, and related components worldwide. It operates through five segments: Engine, Distribution, Components, Power Systems, and New Power. The company offers 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; and offers new parts and services, as well as remanufactured parts and engines.

Cummins Fundamentals Summary

How do Cummins's earnings and revenue compare to its market cap?
CMI fundamental statistics
Market Cap	US$28.38b
Earnings (TTM)	US$1.95b
Revenue (TTM)	US$24.31b

14.7x

P/E Ratio

1.2x

P/S Ratio

Is CMI overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
CMI income statement (TTM)
Revenue	US$24.31b
Cost of Revenue	US$18.57b
Gross Profit	US$5.74b
Other Expenses	US$3.80b
Earnings	US$1.95b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	13.79
Gross Margin	23.61%
Net Profit Margin	8.00%
Debt/Equity Ratio	43.9%

How did CMI perform over the long term?

See historical performance and comparison

Dividends

2.9%

Current Dividend Yield

42%

Payout Ratio

Does CMI pay a reliable dividends?

See CMI dividend history and benchmarks

When do you need to buy CMI by to receive an upcoming dividend?
Cummins dividend dates
Ex Dividend Date	May 19 2022
Dividend Pay Date	Jun 02 2022
Days until Ex dividend	1 day
Days until Dividend pay date	15 days

Does CMI pay a reliable dividends?

See CMI dividend history and benchmarks

Valuation

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

Valuation Score

4/6

Valuation Score 4/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

37.5%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: CMI ($202.69) is trading below our estimate of fair value ($324.38)

Significantly Below Fair Value: CMI is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: CMI is good value based on its PE Ratio (14.7x) compared to the US Machinery industry average (21.5x).

PE vs Market: CMI is good value based on its PE Ratio (14.7x) compared to the US market (15.5x).

Price to Earnings Growth Ratio

PEG Ratio: CMI is poor value based on its PEG Ratio (3.2x)

Price to Book Ratio

PB vs Industry: CMI is overvalued based on its PB Ratio (3.4x) compared to the US Machinery industry average (2.2x).

Future Growth

How is Cummins forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

4.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: CMI's forecast earnings growth (4.7% per year) is above the savings rate (1.9%).

Earnings vs Market: CMI's earnings (4.7% per year) are forecast to grow slower than the US market (12.6% per year).

High Growth Earnings: CMI's earnings are forecast to grow, but not significantly.

Revenue vs Market: CMI's revenue (3.6% per year) is forecast to grow slower than the US market (8% per year).

High Growth Revenue: CMI's revenue (3.6% per year) is forecast to grow slower than 20% 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 (26.6%)

Past Performance

How has Cummins performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

9.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: CMI has high quality earnings.

Growing Profit Margin: CMI's current net profit margins (8%) are lower than last year (9%).

Past Earnings Growth Analysis

Earnings Trend: CMI's earnings have grown by 9% per year over the past 5 years.

Accelerating Growth: CMI's earnings growth over the past year (3.7%) is below its 5-year average (9% per year).

Earnings vs Industry: CMI earnings growth over the past year (3.7%) underperformed the Machinery industry 29.3%.

Return on Equity

High ROE: CMI's Return on Equity (21.1%) is considered high.

Financial Health

How is Cummins's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: CMI's short term assets ($12.6B) exceed its short term liabilities ($7.5B).

Long Term Liabilities: CMI's short term assets ($12.6B) exceed its long term liabilities ($7.2B).

Debt to Equity History and Analysis

Debt Level: CMI's net debt to equity ratio (14%) is considered satisfactory.

Reducing Debt: CMI's debt to equity ratio has increased from 26% to 43.9% over the past 5 years.

Debt Coverage: CMI's debt is well covered by operating cash flow (50.6%).

Interest Coverage: CMI's interest payments on its debt are well covered by EBIT (31.3x coverage).

Balance Sheet

Dividend

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

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

2.86%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: CMI's dividend (2.86%) is higher than the bottom 25% of dividend payers in the US market (1.54%).

High Dividend: CMI's dividend (2.86%) is low compared to the top 25% of dividend payers in the US market (4.05%).

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.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (42%), CMI's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (64%), CMI's dividend payments are covered by cash flows.

Next Steps

Explore strong dividend paying companies in the Capital Goods industry.

Management

How experienced are the management team and are they aligned to shareholders interests?

1.5yrs

Average management tenure

CEO

Tom Linebarger (58 yo)

10.33yrs

Tenure

US$15,645,919

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 ($USD15.65M) is about average for companies of similar size in the US market ($USD13.26M).

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

Leadership Team

Experienced Management: CMI's management team is not considered experienced ( 1.5 years average tenure), which suggests a new team.

Board Members

Experienced Board: CMI's board of directors are seasoned and experienced ( 12.7 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: CMI insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

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

Data	Last Updated (UTC time)
Company Analysis	2022/05/16 00:00
End of Day Share Price	2022/05/16 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31