Contrasting Cummins (CMI) & The Competition
Cummins (NYSE: CMI) is one of 25 publicly-traded companies in the “Construction Supplies & Fixtures” industry, but how does it compare to its rivals? We will compare Cummins to related businesses based on the strength of its institutional ownership, risk, earnings, dividends, analyst recommendations, profitability and valuation.
Volatility and Risk
Cummins has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500. Comparatively, Cummins’ rivals have a beta of 1.40, meaning that their average stock price is 40% more volatile than the S&P 500.
Valuation & Earnings
This table compares Cummins and its rivals revenue, earnings per share (EPS) and valuation.
|Gross Revenue||EBITDA||Price/Earnings Ratio|
|Cummins||$18.36 billion||$2.35 billion||18.65|
|Cummins Competitors||$2.53 billion||$322.06 million||27.24|
Cummins has higher revenue and earnings than its rivals. Cummins is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.
Institutional & Insider Ownership
80.4% of Cummins shares are owned by institutional investors. Comparatively, 83.9% of shares of all “Construction Supplies & Fixtures” companies are owned by institutional investors. 0.6% of Cummins shares are owned by company insiders. Comparatively, 8.5% of shares of all “Construction Supplies & Fixtures” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Cummins pays an annual dividend of $4.32 per share and has a dividend yield of 2.6%. Cummins pays out 48.8% of its earnings in the form of a dividend. As a group, “Construction Supplies & Fixtures” companies pay a dividend yield of 1.6% and pay out 31.7% of their earnings in the form of a dividend. Cummins has increased its dividend for 7 consecutive years.
This is a breakdown of recent ratings and price targets for Cummins and its rivals, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Cummins presently has a consensus target price of $162.75, indicating a potential downside of 1.50%. As a group, “Construction Supplies & Fixtures” companies have a potential upside of 18.00%. Given Cummins’ rivals stronger consensus rating and higher possible upside, analysts plainly believe Cummins has less favorable growth aspects than its rivals.
This table compares Cummins and its rivals’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Cummins rivals beat Cummins on 10 of the 15 factors compared.
Cummins Company Profile
Cummins Inc. designs, manufactures, distributes and services diesel and natural gas engines and engine-related component products. The Company’s segments include Engine, Distribution, Components and Power Systems. The Engine segment manufactures and markets a range of diesel and natural gas powered engines under the Cummins brand name, as well as certain customer brand names, for the heavy and medium-duty truck, bus, recreational vehicle (RV), light-duty automotive and agricultural markets. The Distribution segment consists of the product lines, which service and/or distribute a range of products and services, including parts, engines, power generation and service. The Components segment supplies products, including aftertreatment systems, turbochargers, filtration products and fuel systems for commercial diesel applications. The Power Systems segment consists of businesses, including Power generation, Industrial and Generator technologies.
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