CMI vs CDS Which Performs Better?

CMI (Cummins Inc.) and CDS (Cadence Design Systems, Inc.) are two companies that operate in completely different industries but are both listed on the stock market. CMI specializes in manufacturing engines and power generation products, while CDS focuses on electronic design automation software. Despite their differences, both companies have experienced growth and success in their respective markets. This comparison of CMI vs CDS stocks will delve into their financial performance, market positioning, and potential investment opportunities for investors looking to diversify their portfolios.

CMI or CDS?

When comparing CMI and CDS, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between CMI and CDS.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. CMI has a dividend yield of -%, while CDS has a dividend yield of 3.71%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. CMI reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, CDS reports a 5-year dividend growth of 8.45% year and a payout ratio of 0.00%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with CMI P/E ratio at -0.88 and CDS's P/E ratio at 13.52. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. CMI P/B ratio is -0.05 while CDS's P/B ratio is 1.46.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, CMI has seen a 5-year revenue growth of -0.96%, while CDS's is 0.06%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with CMI's ROE at 6.33% and CDS's ROE at 11.08%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ₹4.56 for CMI and ¥1829.00 for CDS. Over the past year, CMI's prices ranged from ₹4.22 to ₹8.20, with a yearly change of 94.31%. CDS's prices fluctuated between ¥1651.00 and ¥1931.00, with a yearly change of 16.96%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.