Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, diesel engine manufacturer Cummins
With that in mind, let's take a closer look at Cummins' business and see what CAPS investors are saying about the stock right now.
Cummins facts
| Headquarters (Founded) | Columbus, Ind. (1919) |
| Market Cap | $18.9 billion |
| Industry | Diversified machinery |
| Trailing-12-Month Revenue | $12.5 billion |
| Management |
CEO Theodore M. Solso (since 2000) COO N. Thomas Linebarger (since 2008) |
| Return on Assets (Average, Past 3 Years) | 8.1% |
| Cash/Debt | $1.24 billion / $830 million |
| Dividend Yield | 1.1% |
| Competitors |
Caterpillar
Navistar International
Honeywell |
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 94% of the 1,079 members who have rated Cummins believe the stock will outperform the S&P 500 going forward. These bulls include malcolmcochran and 133T4dip.
Just last month, malcolmcochran touched briefly on Cummins' technological prowess: "Big company with motors with improved technology. Quality people in R&D. I am hopeful this will give [Cummins] an edge."
Shares of Cummins have more than doubled over the past year on rebounding global demand, but many Fools believe they're still worth paying up for. Thanks in large part to its low cost structure, Cummins' three-year average return on assets (8.1%) easily tops that of its closest foes, Navistar (2.4%) and Caterpillar (3.4%), as well as other rivals like Honeywell (6.5%), Deere
CAPS member 133T4dip elaborates on Cummins' advantages:
A large part of its current success is because it entered China, India and Brazil decades ago before other companies. They are reaping those rewards only now. These three exploding economies account for a large part of [Cummins'] revenue and it doesn't show any signs of slowing down. Compared to [Caterpillar], it's really cheap, and I think it has better long term prospects than [Caterpillar]. The North American truck market and Ram sales have been slow so far. I wouldn't be surprised if this starts playing a role in the earnings in the near future.
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