Cummins vs Ford Motor

Cummins and Ford Motor Company are two major players in the automotive industry, each with its own unique strengths and weaknesses. Cummins is a global leader in high-performance engines and power systems, while Ford is known for its iconic vehicles and innovative technology. Investors looking to diversify their portfolio may consider comparing Cummins and Ford stocks, analyzing factors such as financial performance, competitive positioning, and industry trends to make informed investing decisions.

Cummins or Ford Motor?

When comparing Cummins and Ford Motor, 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 Cummins and Ford Motor.

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. Cummins has a dividend yield of 2.06%, while Ford Motor has a dividend yield of 7.2%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Cummins reports a 5-year dividend growth of 7.92% year and a payout ratio of 48.61%. On the other hand, Ford Motor reports a 5-year dividend growth of 11.36% year and a payout ratio of 81.49%.

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 Cummins P/E ratio at 23.46 and Ford Motor's P/E ratio at 11.26. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Cummins P/B ratio is 4.78 while Ford Motor's P/B ratio is 0.99.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Cummins has seen a 5-year revenue growth of 0.64%, while Ford Motor's is 0.09%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Cummins's ROE at 20.40% and Ford Motor's ROE at 8.85%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $332.28 for Cummins and $10.82 for Ford Motor. Over the past year, Cummins's prices ranged from $212.80 to $339.19, with a yearly change of 59.39%. Ford Motor's prices fluctuated between $9.49 and $14.85, with a yearly change of 56.48%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.