CMI - Cummins: This Dividend Grower Is Now A Buy Again

2024-06-15 07:30:00 ET

Summary

• Since I last covered Cummins with a hold rating in April, shares have dipped 12%.
• The company's net sales and adjusted diluted EPS fell modestly in Q1, but the fundamentals arguably remain intact.
• Cummins' already impressive financial health is improving.
• Shares of the industrial look to be priced moderately below my fair value estimate.
• Cummins appears to have a clear path to 35%+ cumulative total returns through 2026.

One of the beauties of capitalism is that there are thousands of publicly traded businesses in the U.S. Even filtering for quality, there may be hundreds of exceptional dividend growth stocks, with at least a handful of them being attractive buys at any given time.

This is why I believe that patience and not forcing one's hand as an investor is so important. I have found that waiting for the opportune time to buy a great business generally produces much better results than the FOMO of rushing a purchase....

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