Stock In Focus – TAM Stock Screener – Cummins Inc (CMI)

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As part of our ongoing series here at The Acquirer’s Multiple, we provide this feature article titled ‘Stock in Focus‘ where we focus on one of the stocks from our Stock Screeners.

One of the cheapest stocks in our Stock Screeners is:

Cummins Inc (CMI)

Cummins is the top manufacturer of diesel engines used in commercial trucks, off-highway equipment, and railroad locomotives, in addition to standby and prime power generators. The company also sells powertrain components, which include filtration products, transmissions, turbochargers, aftertreatment systems, and fuel systems. Cummins is in the unique position of competing with its primary customers, heavy-duty truck manufacturers, who make and aggressively market their own engines. Despite robust competition across all its segments and increasing government regulation of diesel emissions, Cummins has maintained its leadership position in the industry.

A quick look at the share price history (below) over the past twelve months shows that the price is up 9%. Here’s why the company is undervalued.

CMI Chart

CMI data by YCharts


Market Cap: $33.26 Billion

Enterprise Value: $40.12 Billion

Operating Earnings

Operating Earnings: $2.366 Billion

Acquirer’s Multiple

Acquirer’s Multiple: 17

Free Cash Flow (TTM)

Free Cash Flow: $992 Million

FCF/EV Yield %:

FCF/EV Yield: 2.98

Shareholder Yield %:

Shareholder Yield: 4.00

Other Indicators

F-Score: 3.00

Altman Z-Score: 3.016

ROA (5 Year Avge%): 8

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