CMI - Cummins: It's Too Late To Buy This Dividend Growth Stock

2024-04-12 11:25:43 ET

Summary

• Since my article in December, shares of Cummins have sharply rallied and vastly outperformed the S&P 500 index.
• The industrial sector topped the analyst consensus for revenue while missing on adjusted diluted EPS in Q4.
• Cummins still boasts an A credit rating from S&P on a stable outlook.
• Shares of the blue chip have swung from moderately undervalued to somewhat overvalued.
• Until the next sell-off, I won't be adding to my position in Cummins.

In a majority of cases, buying quality dividend growth stocks when they are undervalued has a way of eventually paying off. Typically, the only question is how soon such a decision will pay off.

Sometimes, it takes at least several years for sentiment toward a stock and the underlying business to improve and deliver alpha. Other times, it only takes months....

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