Fact based stock research
Cummins (NYSE:CMI)

US2310211063

How to read the free ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Cummins stock research in summary

cummins.com

ANALYSIS: With an Obermatt Combined Rank of 77 (better than 77% compared with investment alternatives), Cummins (Heavy Machinery, USA) shares have much better financial characteristics than comparable stocks. Shares of Cummins are a good value (attractively priced) with a consolidated Value Rank of 81 (better than 81% of alternatives), show above-average growth (Growth Rank of 71) but are riskily financed (Safety Rank of 31), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 77, is a strong buy recommendation based on Cummins's financial characteristics. As the company Cummins's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 81) and above-average growth (Obermatt Growth Rank of 71), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 31) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	81
Growth Rank	71
Safety Rank	31
Combined Rank	77

Country	USA
Industry	Heavy Machinery
Index	Dividends USA, Low Waste, Recycling, S&P 500
Size class	XX-Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Cummins

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	69	89	82	81
GROWTH
GROWTH	41	29	15	71
SAFETY
SAFETY	51	72	53	31
SENTIMENT
SENTIMENT	n/a	28	72	^new
360° VIEW
360° VIEW	n/a	65	62	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Cummins is in the corresponding investment strategy.
Upgrade to a Premium Account to access the latest ranks.

Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	69	89	82	81
GROWTH
GROWTH	41	29	15	71
SAFETY
SAFETY	51	72	53	31
COMBINED
COMBINED	63	72	55	77

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Cummins the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 81 (better than 81% compared with alternatives) for 2024, Cummins shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Cummins. Price-to-Sales (P/S) is 58, which means that the stock price compared with what market professionals expect for future sales is lower than for 58% of comparable companies, indicating a good value concerning Cummins's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 64% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 95 (dividends are expected to be higher than 95% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 62% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Cummins to 38. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 81, is a buy recommendation based on Cummins's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner in assets than its competitors. For instance, the company could be leasing its production facilities or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the three good value ranks for Sales, Profits, and Dividends are reliable indicators for the stock price value. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	57	74	56	58
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	95	88	75	64
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	16	28	39	38
DIVIDEND YIELD
DIVIDEND YIELD	94	93	98	95
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	69	89	82	81

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Cummins; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 71 (better than 71% compared with alternatives), Cummins shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Cummins. Profit Growth has a rank of 70, which means that currently professionals expect the company to grow its profits more than 70% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 87 (above 87% of alternative investments). But Sales Growth has a below the median rank of 27, which means that, currently, professionals expect the company to grow less than 73% of its competitors, and Capital Growth also has a lower rank of 47. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 71, is a buy recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Cummins. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	51	33	12	27
PROFIT GROWTH
PROFIT GROWTH	38	37	70	70
CAPITAL GROWTH
CAPITAL GROWTH	n/a	60	34	47
STOCK RETURNS
STOCK RETURNS	36	47	21	87
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	41	29	15	71

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Cummins.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 31 (better than 31% compared with alternatives), the company Cummins has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Cummins is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Cummins. Liquidity is at 57, meaning the company generates more profit to service its debt than 57% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 30, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 70% of its competitors. Leverage is also high at a rank of 40, which means that the company has an above-average debt-to-equity ratio. It has more debt than 60% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 31 (worse than 69% compared with alternatives), Cummins has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	46	48	30	40
REFINANCING
REFINANCING	38	47	48	30
LIQUIDITY
LIQUIDITY	63	89	73	57
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	51	72	53	31

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Cummins and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	40	38	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	32	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	26	82	^new
MARKET PULSE
MARKET PULSE	n/a	62	62	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	28	72	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Cummins.
Upgrade to a Premium Account to access the latest ranks.