Cummins (NYSE: CMI) and Power Solutions International (OTCMKTS:PSIX) are both auto/tires/trucks companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, risk, earnings, dividends and valuation.
Institutional and Insider Ownership
84.2% of Cummins shares are held by institutional investors. Comparatively, 5.7% of Power Solutions International shares are held by institutional investors. 0.6% of Cummins shares are held by insiders. Comparatively, 56.5% of Power Solutions International shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Volatility & Risk
Cummins has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500. Comparatively, Power Solutions International has a beta of 2.14, indicating that its share price is 114% more volatile than the S&P 500.
Cummins pays an annual dividend of $4.32 per share and has a dividend yield of 2.9%. Power Solutions International does not pay a dividend. Cummins pays out 40.7% of its earnings in the form of a dividend. Cummins has raised its dividend for 8 consecutive years.
This is a breakdown of recent ratings and recommmendations for Cummins and Power Solutions International, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Power Solutions International||0||0||0||0||N/A|
Cummins currently has a consensus price target of $170.74, suggesting a potential upside of 14.92%. Given Cummins’ higher possible upside, analysts plainly believe Cummins is more favorable than Power Solutions International.
Earnings and Valuation
This table compares Cummins and Power Solutions International’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Cummins||$20.43 billion||1.20||$999.00 million||$10.62||13.99|
|Power Solutions International||$389.45 million||0.28||$14.27 million||N/A||N/A|
Cummins has higher revenue and earnings than Power Solutions International.
This table compares Cummins and Power Solutions International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Power Solutions International||N/A||N/A||N/A|
Cummins beats Power Solutions International on 11 of the 14 factors compared between the two stocks.
Cummins Inc. designs, manufactures, distributes, and services diesel and natural gas engines, and engine-related component products worldwide. It operates through four segments: Engine, Distribution, Components, and Power Systems segments. The Engine segment manufactures and markets a range of diesel and natural gas powered engines under the Cummins and other customer brands for the heavy-and medium-duty truck, bus, recreational vehicle, light-duty automotive, construction, mining, marine, rail, oil and gas, defense, and agricultural markets. This segment also offers new parts and services, as well as remanufactured parts and engines. The Distribution segment distributes parts, engines, and power generation products; and provides service solutions, such as maintenance contracts, engineering services, and integrated products. The Components segment offers emission solutions, including custom engineering systems and integrated controls, oxidation catalysts, particulate filters, selective catalytic reduction systems, and engineered components; and turbochargers for light-duty, mid-range, heavy-duty, and high-horsepower diesel markets. This segment also provides air and fuel filters, fuel water separators, lube and hydraulic filters, coolants, fuel additives, and other filtration systems; and fuel systems for heavy-duty on-highway diesel engine applications, as well as remanufactures fuel systems. The Power Generation segment offers components that back-up and prime power generators, controls, paralleling systems, and transfer switches, as well as A/C generator/alternator products under the Stamford, AVK, and Markon brands. Cummins Inc. sells its products to original equipment manufacturers, dealers/distributors, and end users. The company was formerly known as Cummins Engine Company and changed its name to Cummins Inc. in 2001. Cummins Inc. was founded in 1919 and is headquartered in Columbus, Indiana.
About Power Solutions International
Power Solutions International, Inc. designs, manufactures, distributes, and supports power systems and custom engineered integrated electrical power generation systems for industrial original equipment manufacturers (OEMs) of off-highway industrial equipment and on-road medium trucks and busses. It offers spark-ignited water-cooled internal combustion engines that run on alternative fuels and gasoline; power systems for on-road and off-road equipment; and other engine power products, including power take off clutch assemblies for industrial applications; and engine packaging, subsystems, kits, and componentry associated with cooling systems, electronic systems, air intake systems, fuel systems, housings and power takeoff systems, exhaust systems, hydraulic systems, and enclosures to industrial OEMs for incorporation into their applications. The company also distributes Perkins and Caterpillar diesel power systems; and designs and manufactures electronic fuel-injection systems that enable gasoline engines to be fueled by liquid propane. It serves industrial OEMs across a range of industries, including stationary electricity power generation, oil and gas, material handling, aerial work platforms, industrial sweepers, arbor, welding, airport ground support, turf, agricultural, construction, and irrigation. The company sells its products and services primarily in North America, as well as in the Pacific Rim and Europe. Power Solutions International, Inc. was founded in 1985 and is headquartered in Wood Dale, Illinois.
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