Cummins vs IDI Which Is Superior?

Cummins and IDI are two popular stocks in the automotive industry, known for their diesel engines. Cummins, a well-established company, has a strong track record of performance and innovation in the market. Meanwhile, IDI, a newer player in the industry, has been gaining attention for its disruptive technology and growth potential. Investors are closely watching the competitive dynamics between these two stocks as both companies vie for market share and profitability in the diesel engine sector.

Cummins or IDI?

When comparing Cummins and IDI, 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 IDI.

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 1.91%, while IDI has a dividend yield of 7.31%. 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 45.64%. On the other hand, IDI reports a 5-year dividend growth of -5.46% year and a payout ratio of -3265.34%.

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 23.67 and IDI's P/E ratio at -413.90. 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 4.81 while IDI's P/B ratio is 0.68.

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 IDI's is 0.23%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Cummins's ROE at 22.20% and IDI's ROE at -0.16%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $357.15 for Cummins and €68.00 for IDI. Over the past year, Cummins's prices ranged from $216.92 to $370.21, with a yearly change of 70.67%. IDI's prices fluctuated between €62.80 and €76.80, with a yearly change of 22.29%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.