Mayville Engineering (NYSE:MEC) versus Cummins (NYSE:CMI) Head to Head Review

Cummins (NYSE:CMI) and Mayville Engineering (NYSE:MEC) are both industrials companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, earnings and institutional ownership.

Institutional & Insider Ownership

83.5% of Cummins shares are held by institutional investors. Comparatively, 45.4% of Mayville Engineering shares are held by institutional investors. 0.3% of Cummins shares are held by insiders. Comparatively, 5.6% of Mayville Engineering shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Cummins has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500. Comparatively, Mayville Engineering has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500.

Valuation and Earnings

This table compares Cummins and Mayville Engineering”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cummins	$33.67 billion	2.18	$2.84 billion	$19.57	27.19
Mayville Engineering	$546.49 million	0.80	-$8.11 million	($0.84)	-20.38

Cummins has higher revenue and earnings than Mayville Engineering. Mayville Engineering is trading at a lower price-to-earnings ratio than Cummins, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations and price targets for Cummins and Mayville Engineering, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cummins	0	5	13	0	2.72
Mayville Engineering	1	1	4	0	2.50

Cummins currently has a consensus target price of $750.75, suggesting a potential upside of 41.10%. Mayville Engineering has a consensus target price of $35.75, suggesting a potential upside of 108.82%. Given Mayville Engineering’s higher probable upside, analysts plainly believe Mayville Engineering is more favorable than Cummins.

Profitability

This table compares Cummins and Mayville Engineering’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cummins	7.82%	25.29%	9.88%
Mayville Engineering	-2.95%	-6.63%	-2.99%

Summary

Cummins beats Mayville Engineering on 11 of the 14 factors compared between the two stocks.

About Cummins

Cummins Inc. designs, manufactures, distributes, and services diesel and natural gas engines, electric and hybrid powertrains, and related components worldwide. It operates through five segments: Engine, Distribution, Components, Power Systems, and Accelera. The company offers 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; and offers parts and services, as well as remanufactured parts and engines. It provides power generation systems, horsepower engines, heavy and medium duty engines, application engineering services, custom-designed assemblies, retail and wholesale aftermarket parts, and in-shop and field-based repair services. In addition, the company offers emission solutions; turbochargers; air and fuel filters, fuel water separators, lube and hydraulic filters, coolants, fuel additives, and other filtration systems; and electronic control modules, sensors, and supporting software, as well as new, replacement, and remanufactured fuel systems. Further, it provides automated transmissions; standby and prime power generators, controls, paralleling systems, and transfer switches, as well as A/C generator/alternator products under the Stamford and AVK brands; and electrified power systems with components and subsystems, including battery, fuel cell, and hydrogen production technologies. Additionally, it offers filtration, aftertreatment, controls systems, air handling systems, and electric power generation systems, and batteries. It sells its products to original equipment manufacturers, distributors, dealers, and other customers. 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 Mayville Engineering

Mayville Engineering Company, Inc., together with its subsidiaries, engages in the production, design, prototyping and tooling, fabrication, aluminum extrusion, coating, and assembling of aftermarket components in the United States. It also supplies engineered components to original equipment manufacturers. The company serves heavy and medium duty commercial vehicles, construction and access equipment, powersports, agriculture, military, and other end markets. Mayville Engineering Company, Inc. was founded in 1945 and is headquartered in Milwaukee, Wisconsin.