Cummins vs Travis Perkins Which Is Stronger?

Cummins Inc. and Travis Perkins are two companies in the industrial and construction sectors, each with unique strengths and potential for growth. Cummins is a global leader in manufacturing engines, power generators, and related products, with a strong track record of innovation and customer satisfaction. On the other hand, Travis Perkins is one of the largest suppliers of building materials and construction products in the UK, with a widespread presence and a focus on serving the needs of both tradespeople and consumers. Both companies face challenges and opportunities in their respective markets, making them intriguing options for investors looking to capitalize on the industrial and construction sectors.

Cummins or Travis Perkins?

When comparing Cummins and Travis Perkins, 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 Travis Perkins.

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 1.85%, while Travis Perkins has a dividend yield of 1.85%. 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, Travis Perkins reports a 5-year dividend growth of 0.00% year and a payout ratio of -217.82%.

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 24.71 and Travis Perkins's P/E ratio at -92.93. 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 5.02 while Travis Perkins's P/B ratio is 0.79.

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 Travis Perkins's is -0.25%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Cummins's ROE at 22.20% and Travis Perkins's ROE at -0.85%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $375.08 for Cummins and $9.67 for Travis Perkins. Over the past year, Cummins's prices ranged from $226.53 to $387.90, with a yearly change of 71.24%. Travis Perkins's prices fluctuated between $8.73 and $13.00, with a yearly change of 48.91%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.