8. Cummins Inc. (NYSE:)
Number of Hedge Fund Holders: 32
Cummins Inc. (NYSE:CMI), an American company, makes diesel and natural gas engines, hybrid and electric powertrains, and related components, while also taking charge of distribution and servicing activities. It has 5 segments: Engine, Distribution, Components, Power Systems, and Accelera. Through its Accelera segment, it operates in the hydrogen market, by producing hydrogen for power purposes. Cummins Inc. (NYSE:CMI) is ranked among the largest automotive companies and suppliers in the world.
The company has seen its demand stay strong for its products in the current year which has led the company to an impressive performance in the first quarter of 2024. The company saw its EBITDA increase from $1.4 billion in the period a year ago to $2.6 billion in the 1st quarter. This was primarily due to growth in the North American power generation segment which experienced a cool 21% increase in revenue for the period, the demand most driven by data centers. This quarterly performance follows an impressive yearly performance in 2023, wherein the company recorded revenue of $34.1 billion, which was up by 21% from the previous year on the back of soaring revenue from the North American segment (22% increase in revenue) and international market performance (20% increase in revenue).
On May 24, 2024, Accelera™ by Cummins unveiled updated models of its hydrogen fuel cell engines for commercial vehicles at the Advanced Clean Transportation (ACT) Expo in Las Vegas, driving its name in the decarbonizing technologies market. Furthermore, in June 2024, Accelera entered into a joint venture, “Amplify Cell Technologies”, with Daimler Trucks and PACCAR. This joint venture targets the electric commercial vehicles market by providing battery cells. Using this joint venture, the 21-gigawatt hour (GWh) factory is set to be constructed soon, details of which haven’t been disclosed yet.
The company has also increased its quarterly dividend from $1.68 to $1.82 per share, which is next going to be paid in September this year. The company has consecutively increased the dividend for the past 15 years, which means the stock also holds a lot for investors looking for dividend-paying stocks.
As such, the stock has been flowing positively in the investor’s eyes as well, as the stock price soared by 19.43% on a YTD basis. Furthermore, the analysts are seeing the stock going as high as $321 in the next twelve months, as compared to its current price of $286, as of writing this article; that means an upside of 12.2%. The analysts are also thinking quite highly about the earnings of the company in the current year, as they see it soaring high to $18.92 in 2024 from last year’s EPS of $5.2; the company’s earnings per share for the first quarter of this year was recorded at impressive $5.1 per share.
However, the separation of its Atmus Filtration business resulted in a net gain of $1.3 billion in transaction costs and other expenses, and a $29 million increase in its restructuring expense. Atmus Filtration Technologies reported net sales of $400 million for the full year 2023, at the end of which it was separated from Cummins. Thus, the business impact of this divesture shall be brought under consideration by the investors as the company expects its aggregate revenue down by 2% to 5% this year due to this factor.
As of 1st quarter of 2024, 32 hedge fund holders hold interest in the stock, worth $1.5 billion, with Fisher Asset Management and First Eagle Investment Management investing the biggest chunk of it, worth $796.5 million and $588.9 million, respectively, helping the stock bag a place in our list of 10 Best Hydrogen and Fuel Cell Stocks to Buy.
