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As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of Cummins Inc. (NYSE:CMI), it is a financially-sound , dividend-paying company with a a strong track record of performance. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, read the full report on Cummins here.
Excellent balance sheet established dividend payer
CMI delivered a triple-digit bottom-line expansion over the past couple of years, with its most recent earnings level surpassing its average level over the last five years. This illustrates a strong track record, leading to a satisfying return on equity of 26%, which is an notable feat for the company. CMI’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that CMI manages its cash and cost levels well, which is an important determinant of the company’s health. CMI appears to have made good use of debt, producing operating cash levels of 0.96x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
For those seeking income streams from their portfolio, CMI is a robust dividend payer as well. Over the past decade, the company has consistently increased its dividend payout, reaching a yield of 3.1%.
For Cummins, I’ve put together three essential aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for CMI’s future growth? Take a look at our free research report of analyst consensus for CMI’s outlook.
- Valuation: What is CMI worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether CMI is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of CMI? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.