The PE Ratio, or Price-to-Earnings ratio, or P/E Ratio, is a financial ratio used to compare a company's market price to its Earnings per Share (Diluted). As of today (2022-05-27), Cummins's share price is
$207.97.
Cummins's Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Mar. 2022 was $13.46. Therefore, Cummins's PE Ratio for today is 15.45.
Good Sign:
Cummins Inc stock PE Ratio (=15.11) is close to 1-year low of 13.95
The historical rank and industry rank for Cummins's PE Ratio or its related term are showing as below:
CMI'
s PE Ratio Range Over the Past 10 Years
Min: 8.55 Med: 15.4 Max: 32.41
Current: 15.45
During the past 13 years, the highest PE Ratio of Cummins was 32.41. The lowest was 8.55. And the median was 15.40.
CMI's PE Ratio is ranked better than 61% of 2131
companies
in the Industrial Products industry
Industry Median: 19.24
vs CMI: 15.45
As of today (2022-05-27), Cummins's share price is $207.97.
Cummins's EPS without NRI for the trailing twelve months (TTM) ended in Mar. 2022 was $13.46. Therefore, Cummins's PE Ratio without NRI for today is 15.45.
During the past 13 years, Cummins's highestPE Ratio without NRI was 32.41. The lowest was 8.55. And the median was 15.40.
Cummins's EPS without NRI for the
three
months ended in Mar. 2022 was $2.92.
Its EPS without NRI for the trailing twelve months (TTM) ended in Mar. 2022 was $13.46.
During the past 12 months, Cummins's average EPS without NRIGrowth Rate was 6.40% per year.
During the past 3 years, the average EPS without NRIGrowth Rate was 3.60% per year.
During the past 5 years, the average EPS without NRIGrowth Rate was 15.60% per year.
During the past 10 years, the average EPS without NRIGrowth Rate was 5.30% per year.
During the past 13 years, Cummins's highest 3-Year average EPS without NRI Growth Rate was 185.70% per year. The lowest was -69.70% per year. And the median was 11.70% per year.
Cummins's EPS (Basic) for the
three
months ended in Mar. 2022 was $2.94.
Its EPS (Basic) for the trailing twelve months (TTM) ended in Mar. 2022 was $13.58.
Cummins PE Ratio Historical Data
The historical data trend for Cummins's PE Ratio can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
* Premium members only.
Cummins Annual Data
Trend
Dec12
Dec13
Dec14
Dec15
Dec16
Dec17
Dec18
Dec19
Dec20
Dec21
PE Ratio
29.59
10.16
12.36
18.91
14.93
Cummins Quarterly Data
Jun17
Sep17
Dec17
Mar18
Jun18
Sep18
Dec18
Mar19
Jun19
Sep19
Dec19
Mar20
Jun20
Sep20
Dec20
Mar21
Jun21
Sep21
Dec21
Mar22
PE Ratio
20.48
16.37
14.75
14.93
15.24
Competitive Comparison
For the Specialty Industrial Machinery subindustry, Cummins's PE Ratio, along with its competitors' market caps and PE Ratio data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Cummins PE Ratio Distribution
For the Industrial Products industry and Industrials sector, Cummins's PE Ratio distribution charts can be found below:
* The bar in red indicates where Cummins's PE Ratio falls into.
Cummins PE Ratio Calculation
The PE Ratio, or Price-to-Earnings ratio, or P/E Ratio, is a financial ratio used to compare a company's market price to its Earnings per Share (Diluted). It is the most widely used ratio in the valuation of stocks.
Cummins's Share Price of today is $207.97.
Cummins's Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Mar. 2022 adds up the quarterly data reported by the company within the most recent 12 months, which was $13.46.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
It can also be calculated from the numbers for the whole company:
There are at least three kinds of PE Ratios used by different investors. They are Trailing Twelve Month PE Ratio or PE Ratio (TTM), Forward PE Ratio, or PE Ratio without NRI. A new PE Ratio based on inflation-adjusted normalized PE Ratio is called Shiller PE Ratio, after Yale professor Robert Shiller.
In the calculation of PE Ratio, the earnings per share used are the earnings per share over the past 12 months. For Forward PE Ratio, the earnings are the expected earnings for the next twelve months. In the case of PE Ratio without NRI, the reported earnings less the non-recurring items are used.
For Shiller PE Ratio, the earnings of the past 10 years are inflation-adjusted and averaged. Since it looks at the average over the last 10 years, Shiller PE Ratio is also called PE10.
Cummins (NYSE:CMI) PE Ratio Explanation
The PE Ratio can be viewed as the number of years it takes for the company to earn back the price you pay for the stock. For example, if a company earns $2 a share per year, and the stock is traded at $30, the PE Ratio is 15. Therefore it takes 15 years for the company to earn back the $30 you paid for its stock, assuming the earnings stays constant over the next 15 years.
In real business, earnings never stay constant. If a company can grow its earnings, it takes fewer years for the company to earn back the price you pay for the stock. If a company's earnings decline it takes more years. As a shareholder, you want the company to earn back the price you pay as soon as possible. Therefore, lower P/E stocks are more attractive than higher P/E stocks so long as the PE Ratio is positive. Also for stocks with the same PE Ratio, the one with faster growth business is more attractive.
If a company loses money, the PE Ratio becomes meaningless.
To compare stocks with different growth rates, Peter Lynch invented a ratio called PEG Ratio. PEG Ratio is defined as the PE Ratio divided by the growth ratio. He thinks a company with a PE Ratio equal to its growth rate is fairly valued. Still he said he would rather buy a company growing 20% a year with a PE Ratio of 20, instead of a company growing 10% a year with a PE Ratio of 10.
Because the PE Ratio measures how long it takes to earn back the price you pay, the PE Ratio can be applied to the stocks across different industries. That is why it is the one of the most important and widely used indicators for the valuation of stocks.
Investors need to be aware that the PE Ratio can be misleading a lot of times, especially when the underlying business is cyclical and unpredictable. As Peter Lynch pointed out, cyclical businesses have higher profit margins at the peaks of the business cycles. Their earnings are high and PE Ratios are artificially low. It is usually a bad idea to buy a cyclical business when the PE Ratio is low. A better ratio to identify the time to buy a cyclical businesses is the PS Ratio .
PE Ratio can also be affected by non-recurring-items such as the sale of part of businesses. This may increase for the current year or quarter dramatically. But it cannot be repeated over and over. Therefore PE Ratio without NRI is a more accurate indication of valuation than PE Ratio.
Cummins PE Ratio Related Terms
Thank you for viewing the detailed overview of Cummins's PE Ratio provided by GuruFocus.com. Please click on the following links to see related term pages.
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.
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