Cummins Inc. (CMI) vs Emerson Electric Co. (EMR)

Cummins Inc. and Emerson Electric Co. are both Specialty Industrial Machinery companies. Emerson Electric Co. is the larger, with a market value of $87.4B against $72.3B — 1.2× the size. Cummins Inc. trades at the lower P/E: 26.7× against 34.6×. Emerson Electric Co. grew revenue faster over the last twelve months: 4.83% against 2.93%. Emerson Electric Co. has the higher net margin (13.8% vs 7.82%) and the lower return on invested capital (9.33% vs 14.4%). Both pay a dividend; Cummins Inc. yields more (2.74% vs 2.08%). Across the 23 metrics below, Cummins Inc. leads on 16 and Emerson Electric Co. on 7.

Valuation

Metric CMI EMR Specialty Industrial Machinery median
P/E 26.71 34.62 29.62
P/S 2.09 4.74 2.77
P/B 5.21 4.34 3.04
Price to free cash flow 21.50 25.55 23.81
EV/EBITDA 15.03 16.13 16.05
EV/Sales 2.17 5.33 2.94
Earnings yield 3.74% 2.89% 3.08%
Free cash flow yield 4.65% 3.91% 3.12%

Profitability

Metric CMI EMR Specialty Industrial Machinery median
Gross margin 25.32% 53.16% 35.90%
Operating margin 11.22% 25.10% 11.22%
Net margin 7.82% 13.83% 7.80%
Free cash flow margin 9.70% 18.57% 9.51%
Return on equity 20.28% 12.80% 11.10%
Return on assets 7.77% 6.09% 4.63%
Return on invested capital 14.42% 9.33% 5.37%

Growth

Metric CMI EMR Specialty Industrial Machinery median
Revenue growth (TTM) 2.93% 4.83% 6.45%
EPS growth (last fiscal year) (27.74%) 17.78% —
Revenue growth, 5-year CAGR 11.19% 1.43% 8.31%
Net income growth, 5-year CAGR 9.71% 3.14% 5.04%

Health

Metric CMI EMR Specialty Industrial Machinery median
Debt to equity 0.50 0.64 0.35
Current ratio 1.73 0.90 2.11
Net debt to EBITDA 0.64 1.95 1.32

Dividend

Metric CMI EMR Specialty Industrial Machinery median
Dividend yield 2.74% 2.08% 1.12%
Payout ratio 0.35 0.37 0.17

Size

Metric CMI EMR Specialty Industrial Machinery median
Market cap 72.31b 87.37b 1.97b

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