Cummins (NYSE: CMI) is one of 25 publicly-traded companies in the “Construction Supplies & Fixtures” industry, but how does it weigh in compared to its peers? We will compare Cummins to related businesses based off the strength of its earnings, risk, profitability, institutional ownership, dividends, analyst recommendations and valuation.

Institutional and Insider Ownership

80.4% of Cummins shares are held by institutional investors. Comparatively, 83.9% of shares of all “Construction Supplies & Fixtures” companies are held by institutional investors. 0.6% of Cummins shares are held by insiders. Comparatively, 8.5% of shares of all “Construction Supplies & Fixtures” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Cummins has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500. Comparatively, Cummins’ peers have a beta of 1.40, meaning that their average stock price is 40% more volatile than the S&P 500.

Profitability

This table compares Cummins and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cummins 8.10% 20.67% 9.91%
Cummins Competitors -23.91% 870.33% 5.77%

Dividends

Cummins pays an annual dividend of $4.32 per share and has a dividend yield of 2.7%. 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 raised its dividend for 7 consecutive years.

Valuation & Earnings

This table compares Cummins and its peers revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Cummins $18.36 billion $2.35 billion 18.38
Cummins Competitors $2.53 billion $322.23 million 27.02

Cummins has higher revenue and earnings than its peers. Cummins is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently the more affordable than other companies in its industry.

Analyst Ratings

This is a breakdown of recent recommendations for Cummins and its peers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cummins 1 7 6 0 2.36
Cummins Competitors 97 536 828 23 2.52

Cummins presently has a consensus target price of $162.75, suggesting a potential downside of 0.04%. All “Construction Supplies & Fixtures” companies have a potential upside of 18.37%. Given Cummins’ peers stronger consensus rating and higher probable upside, analysts clearly believe Cummins has less favorable growth aspects than its peers.

Summary

Cummins peers 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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