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What Makes Cummins One of America’s Best Companies

Daniel Ferry
February 27, 2013

Since 1919, Cummins (NYSE: CMI) has been a leader in the design and manufacture of world-class, high-performance engines. Today, Cummins' engines are renowned for their reliability, fuel efficiency, and low emissions, and can be found in long-haul trucks, buses, light-duty vehicles, and heavy equipment for construction, agriculture, and mining.

Engine sales account for only half of revenue. The remainder comes from power generation equipment like diesel generators, components like the company's state-of-the-art emissions solutions and fuel systems, and distribution. Based in Indiana, Cummins products are sold worldwide: International markets provide about 60% of revenue, and Cummins is well-positioned in fast-growing geographies like Brazil and China.

Cummins' stock has stalled out over the past two years, falling relative to the S&P 500. However, between the introduction of tougher emissions regulations worldwide and the trucking industry's need to fill pent-up demand from the recession, investors shouldn't be surprised to see Cummins roaring back.

The case for Cummins
It's easy to be sustainable in an industry like software or up-scale retail, when your business isn't very environmentally intensive in the first place. But as a manufacturer, especially an engine maker, one might expect that Cummins would have to use lots of resources and create lots of pollution in order to stay competitive. Nothing could be further from the truth.

Cummins has aggressively cut its own greenhouse gas emissions, beating its own goals by reducing emissions by 28% from 2005 levels in 2010. This achievement allowed the company to win the EPA's inaugural Climate Leadership Awards. Now Cummins has set an ambitious goal of reduc