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

Cummins Inc. and Illinois Tool Works Inc. are both Specialty Industrial Machinery companies. Cummins Inc. and Illinois Tool Works Inc. are of similar size ($77.5B and $72.3B). Illinois Tool Works Inc. trades at the lower P/E: 24.8× against 26.7×. Illinois Tool Works Inc. grew revenue faster over the last twelve months: 4.30% against 2.93%. Illinois Tool Works Inc. has the higher net margin (19.4% vs 7.82%) and the higher return on invested capital (23.2% vs 14.4%). Both pay a dividend; Cummins Inc. yields more (2.74% vs 2.18%). Across the 23 metrics below, Cummins Inc. leads on 12 and Illinois Tool Works Inc. on 11.

Valuation

Metric CMI ITW Specialty Industrial Machinery median
P/E 26.71 24.80 29.62
P/S 2.09 4.77 2.77
P/B 5.21 27.14 3.04
Price to free cash flow 21.50 26.82 23.81
EV/EBITDA 15.03 18.35 16.05
EV/Sales 2.17 5.31 2.94
Earnings yield 3.74% 4.03% 3.08%
Free cash flow yield 4.65% 3.73% 3.12%

Profitability

Metric CMI ITW Specialty Industrial Machinery median
Gross margin 25.32% 44.16% 35.90%
Operating margin 11.22% 26.50% 11.22%
Net margin 7.82% 19.39% 7.80%
Free cash flow margin 9.70% 17.78% 9.51%
Return on equity 20.28% 104.62% 11.10%
Return on assets 7.77% 19.63% 4.63%
Return on invested capital 14.42% 23.21% 5.37%

Growth

Metric CMI ITW Specialty Industrial Machinery median
Revenue growth (TTM) 2.93% 4.30% 6.45%
EPS growth (last fiscal year) (27.74%) (10.42%) —
Revenue growth, 5-year CAGR 11.19% 4.99% 8.31%
Net income growth, 5-year CAGR 9.71% 7.77% 5.04%

Health

Metric CMI ITW Specialty Industrial Machinery median
Debt to equity 0.50 3.35 0.35
Current ratio 1.73 1.11 2.11
Net debt to EBITDA 0.64 1.76 1.32

Dividend

Metric CMI ITW Specialty Industrial Machinery median
Dividend yield 2.74% 2.18% 1.12%
Payout ratio 0.35 0.52 0.17

Size

Metric CMI ITW Specialty Industrial Machinery median
Market cap 72.31b 77.47b 1.97b

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