Cummins Inc. (CMI) vs Eaton Corporation, PLC (ETN)

Cummins Inc. and Eaton Corporation, PLC are both Specialty Industrial Machinery companies. Eaton Corporation, PLC is the larger, with a market value of $172.5B against $72.3B — 2.4× the size. Cummins Inc. trades at the lower P/E: 26.7× against 44.6×. Eaton Corporation, PLC grew revenue faster over the last twelve months: 15.5% against 2.93%. Eaton Corporation, PLC has the higher net margin (12.8% vs 7.82%) and the lower return on invested capital (8.71% vs 14.4%). Both pay a dividend; Cummins Inc. yields more (2.74% vs 1.42%). Across the 23 metrics below, Cummins Inc. leads on 15 and Eaton Corporation, PLC on 8.

Valuation

Metric CMI ETN Specialty Industrial Machinery median
P/E 26.71 44.62 29.62
P/S 2.09 5.69 2.77
P/B 5.21 8.42 3.04
Price to free cash flow 21.50 42.73 23.81
EV/EBITDA 15.03 29.04 16.05
EV/Sales 2.17 6.29 2.94
Earnings yield 3.74% 2.24% 3.08%
Free cash flow yield 4.65% 2.34% 3.12%

Profitability

Metric CMI ETN Specialty Industrial Machinery median
Gross margin 25.32% 35.90% 35.90%
Operating margin 11.22% 17.71% 11.22%
Net margin 7.82% 12.75% 7.80%
Free cash flow margin 9.70% 13.32% 9.51%
Return on equity 20.28% 19.66% 11.10%
Return on assets 7.77% 7.92% 4.63%
Return on invested capital 14.42% 8.71% 5.37%

Growth

Metric CMI ETN Specialty Industrial Machinery median
Revenue growth (TTM) 2.93% 15.53% 6.45%
EPS growth (last fiscal year) (27.74%) 10.00% —
Revenue growth, 5-year CAGR 11.19% 8.98% 8.31%
Net income growth, 5-year CAGR 9.71% 23.72% 5.04%

Health

Metric CMI ETN Specialty Industrial Machinery median
Debt to equity 0.50 0.91 0.35
Current ratio 1.73 1.24 2.11
Net debt to EBITDA 0.64 1.46 1.32

Dividend

Metric CMI ETN Specialty Industrial Machinery median
Dividend yield 2.74% 1.42% 1.12%
Payout ratio 0.35 0.49 0.17

Size

Metric CMI ETN Specialty Industrial Machinery median
Market cap 72.31b 172.54b 1.97b

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