Quality Investor

Cummins Inc.

Rank #285ValueWatchlistCompare with other stocks

CMI · NYSE · Industrials

Cummins Inc. (CMI) — Rank #285 by gross profitability (GP/assets 0.24) · ROE 22.1% · Piotroski F-Score N/A.

As-of 2026-10-30 · CIK 0000026172 · all metrics point-in-time as of the filing date.

About

Cummins Inc. offers various power solutions worldwide.

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The company operates through five segments: Engine, Distribution, Components, Power Systems, and Accelera. It offers diesel and natural gas-powered engines; and drivetrain systems, including axles, drivelines, brakes, and suspension systems; and on- and off-highway, and other products. The company also provides aftertreatment technology and solutions comprising custom engineering systems and integrated controls, oxidation catalysts, particulate filters, and selective catalytic reduction systems, as well as engineered components, including dosers; turbochargers, fuel systems, and valvetrain technologies; electronic control modules, sensors, and supporting software; and automated manual transmissions, and automatic transmissions for internal combustion engines. In addition, it sells and offers support services power generation systems, high-horsepower engines, and heavy-duty and medium-duty engines; offers application engineering services, custom-designed assemblies, and in-shop and field-based repair services; and retail and wholesale aftermarket parts. Further, the company offers standby and prime power generators, controls, paralleling systems, and transfer switches; turnkey solutions for distributed generation and energy management applications using natural gas, diesel, battery energy storage systems, and newer alternative sustainable fuels; diesel and natural gas high-speed, high-horsepower engines; and A/C generator/alternator products. Additionally, it provides electrified power systems, including batteries, fuel cells, and electric powertrain technologies. It sells its products to original equipment manufacturers, distributors, dealers, and other customers. 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.

Industry
Specialty Industrial Machinery
Sector
Industrials
State
IN
Filer Category
Large accelerated filer
Fiscal Year End
December 31

Company Snapshot

P/E and dividend yield are the primary valuation lenses for mature businesses.

Market Cap

—

P/E (annual)

—

P/S (annual)

—

P/B

—

P/OCF (annual)

—

Shareholder Yield

—

Employees

67,400

Industry

Specialty Industrial Machinery

Exchange

NYSE

11/12

Flags passed

CMI fails 1 critical flag

Passes 11 of 12 quality flags

  • FAIL
    Revenue declining YoY

    Revenue contracted year over year

  • PASS
    Gross margin holding
  • PASS
    Dilution within 2%
  • PASS
    FCF not negative from investment
  • PASS
    Disclosure consistent
  • PASS
    Operating margin holding
  • PASS
    Free cash flow intact
  • PASS
    Passes safety gate
  • PASS
    Balance sheet stable
  • PASS
    No competitive retreat
  • PASS
    SBC not compressing margin
  • PASS
    No valuation convergence

Strengths Operating leverage expanding · RPO outpacing revenue · Sequential beat (rev + EPS)

A count of the 12 warning flags that could be evaluated. Unweighted: colour follows the worst flag.

Quality Profile

Profitability

1/1 pass
GP / assets
0.24
Return on equity
22.1%
Gross margin trend
PASS

Safety

1/1 pass
Balance-sheet safety
PASS
Debt / equity
1.56
Current ratio
1.73×
Net cash
$3.77B

Cash Flow

2/3 pass
Positive FCF
PASS
Cash-backed earnings
WARN
Accruals healthy
PASS
SBC / revenue
0.3%

Growth

1/2 pass
Revenue growth
-1.3%
Piotroski F-Score
N/A
Share dilution
-0.3%

Dividend yield and payout ratio are the primary reads at this stage (trailing P/E — see valuation above).

Profitability

Does it make money well?

Warning: Revenue declining YoY · GP/assets 44th percentile of 26 SIC 35 peers

Gross profitability (GP / assets)

0.24

Primary signal (Novy-Marx).

44th pctl of 26 SIC 35 peers

Return on equity

22.1%

Gross margin

25.3%

0th pctl of 26 SIC 35 peers

Revenue growth (YoY)

-1.3%

RPO growth (YoY)

16.7%

Remaining performance obligations growth — RPO > revenue = forward demand building.

Gross margin improving

Margin trend vs prior year.

PASS

Operating Leverage

2022202320242025
Revenue vs COGS
Revenue vs OpEx
Op. Income vs Revenue

Growth

Revenue CAGR (3Y)

6.2%

Revenue CAGR (5Y)

11.2%

Earnings CAGR (3Y)

9.7%

FCF CAGR (3Y)

31.6%

Cash Flow Health

Is the cash real?

No warning flags · FCF 16% below net income

Free cash flow

$2.39B

Operating cash flow minus capex.

Positive free cash flow

PASS

FCF vs net income

-16.1%

(FCF − net income) ÷ |net income|. Positive: cash above earnings. Negative: below.

FCF not below net income

Fails when free cash flow is below net income (yellow flag).

WARN

Accruals healthy

Cash-backed earnings.

PASS

SBC / revenue

0.3%

Stock-based comp intensity.

Balance Sheet Strength

Can it survive a storm?

No warning flags · net cash $3.77B

Balance-sheet safety

Composite anti-fragile check.

PASS

Debt / equity

1.56

12th pctl of 26 SIC 35 peers (best = lowest)

Current ratio

1.73×

36th pctl of 26 SIC 35 peers

Quick ratio

0.98×

Net cash

$3.77B

Cash & equivalents minus total debt.

Piotroski F-Score

N/A

Only 8/9 components determinable.

Valuation

Is the price reasonable?

No warning flags

Dividend safety

Composite score

4.2 / 5

Strong
Payout ratio
37.1%4/5 Strong
FCF coverage
2.26×4/5 Strong
Dividend growth streak
10 yr5/5 Strong
Balance-sheet health
D/E 1.56 · IC 12.23×4/5 Strong

Capital allocation quality

Composite score

4.0 / 5

Strong
Share count trend(net buybacks)
-0.3%3/5 Good
Buyback timing
N/AN/A
Dividend growth consistency
10 yr5/5 Strong
Net debt trajectory(deleveraging)
4.6%4/5 Strong

Lifecycle Phase History

20202025
Decline
Op. Leverage
Capital Return
Value

Price History

CMI+153.3% · +20.4% CAGRSPY+82.9% · +12.8% CAGR