Cummins Unveils $2B Share Buyback Plan

Cummins Inc. (NYSE: CMI), a manufacturer of engines, filtration, and power generation products, disclosed that its board of directors has authorized a common stock repurchase program of $2 billion. Notably, the company recently completed its prior authorization of $2 billion, announced in 2019.

Cummins CEO Tom Linebarger said, “The latest share repurchase program reinforces our commitment to delivering strong returns to shareholders and reflects our confidence in our long-term performance.”

Dividend History

Since May 2014, Cummins has increased its common stock cash dividend eight times, the latest being by 7% in July 2021.

On October 12, Cummins’ Board of Directors announced a quarterly common stock cash dividend of $1.45 per share, which was paid on December 2, 2021, to shareholders of record as of November 19. The company’s annual dividend of $5.80 per share now reflects a dividend yield of 2.68%.

Wall Street’s Take

On December 10, Deutsche Bank analyst Nicole Deblase maintained a Hold rating on the stock and decreased the price target to $247 (14.05% upside potential) from $251.

The rest of the Street is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on 4 Buys and 3 Holds. The average Cummins price target of $280.29 implies 29.42% upside potential. Shares have lost 3.3% over the past year.

Risk Analysis

According to the new TipRanks Risk Factors tool, Cummins stock is at risk mainly from three factors: Production, Legal and Regulatory, and Macro & Political, which contribute 29%, 24%, and 21%, respectively to the total 34 risks identified for the stock.