Cummins Inc. (CMI) vs Illinois Tool Works Inc. (ITW)

Cummins Inc. and Illinois Tool Works Inc. are both Specialty Industrial Machinery companies. Illinois Tool Works Inc. is the larger, with a market value of $81.1B against $61.8B — 1.3× the size. Cummins Inc. trades at the lower P/E: 18.6× against 25.4×. Cummins Inc. grew revenue faster over the last twelve months: 6.69% against 4.80%. Illinois Tool Works Inc. has the higher net margin (19.4% vs 9.26%) and the higher return on invested capital (23.7% vs 16.5%). Both pay a dividend; Illinois Tool Works Inc. yields more (2.30% vs 1.83%). Across the 23 metrics below, Cummins Inc. leads on 14 and Illinois Tool Works Inc. on 9.

Valuation

Metric CMI ITW Specialty Industrial Machinery median
P/E 18.57 25.38 25.64
P/S 1.72 4.88 2.81
P/B 4.28 25.85 2.99
Price to free cash flow 17.75 28.21 23.82
EV/EBITDA 11.41 18.59 15.15
EV/Sales 1.79 5.39 2.77
Earnings yield 5.38% 3.94% 3.07%
Free cash flow yield 5.63% 3.55% 3.67%

Profitability

Metric CMI ITW Specialty Industrial Machinery median
Gross margin 25.88% 44.32% 35.46%
Operating margin 12.52% 26.61% 10.04%
Net margin 9.26% 19.39% 7.24%
Free cash flow margin 9.66% 17.30% 9.04%
Return on equity 24.19% 101.65% 10.73%
Return on assets 9.45% 19.78% 4.51%
Return on invested capital 16.54% 23.65% 5.00%

Growth

Metric CMI ITW Specialty Industrial Machinery median
Revenue growth (TTM) 6.69% 4.80% 6.59%
EPS growth (last fiscal year) (27.74%) (10.42%) 5.97%
Revenue growth, 5-year CAGR 11.19% 4.99% 8.53%
Net income growth, 5-year CAGR 9.71% 7.77% 6.58%

Health

Metric CMI ITW Specialty Industrial Machinery median
Debt to equity 0.47 2.98 0.33
Current ratio 1.74 1.29 2.08
Net debt to EBITDA 0.64 1.76 1.32

Dividend

Metric CMI ITW Specialty Industrial Machinery median
Dividend yield 1.83% 2.30% 1.11%
Payout ratio 0.34 0.58 0.31

Size

Metric CMI ITW Specialty Industrial Machinery median
Market cap 61.75b 81.11b 2.19b

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