7 Best Cheap Energy Stocks to Invest in Now

3. Cummins Inc. (NYSE:CMI) 

Number of Hedge Fund Holders: 53

P/E Ratio: 12.71

Cummins Inc. (NYSE:CMI) is a frontrunner in diesel, natural gas, and electric power systems, meeting global needs through its various business units. The company is growing its industrial power lineup while making progress in cutting carbon.

For the fourth quarter that ended December 31, 2024, Cummins Inc. (NYSE:CMI) posted $8.4 billion in revenue, down 1% from last year due to weaker North American truck demand and the Atmus split-off. Yet, full-year sales reached $34.1 billion, showing strong interest in power generation and aftermarket services. Adjusted EBITDA for Q4 hit $1.3 billion, while full-year EBITDA set a record at $6.3 billion. The Power Systems Unit, a key performer, showed 18.4% EBITDA margins, up from 14.7% in 2023.

To reinforce its clean energy portfolio, Cummins Inc. (NYSE:CMI) acquired certain assets from First Mode, a company that makes hybrid retrofit solutions for mining and rail applications. The purchase includes hydrogen and battery drive technology, supporting the company’s push toward lower carbon emissions. Furthermore, Cummins partnered with Liberty Energy Inc. to roll out a variable-speed natural gas engine for fracking, boosting fuel efficiency and reducing emissions.

Looking ahead, Cummins Inc. (NYSE:CMI) expects 2025 revenue to range between a 2% decline and 3% growth, with EBITDA margins forecast at 16.2% to 17.2%. While demand for trucks in North America may soften in early 2025, steady demand for power generation and aftermarket services should provide stability. With its focus on new ideas and careful capital management, Cummins remains a good cheap energy stock to consider in today’s market.