Brunswick (NYSE: BC) and Cummins (NYSE:CMI) are both consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, analyst recommendations, institutional ownership, dividends, profitability, earnings and risk.
This table compares Brunswick and Cummins’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current ratings and recommmendations for Brunswick and Cummins, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Brunswick currently has a consensus target price of $70.78, suggesting a potential upside of 2.74%. Cummins has a consensus target price of $170.74, suggesting a potential upside of 21.23%. Given Cummins’ higher possible upside, analysts clearly believe Cummins is more favorable than Brunswick.
Brunswick pays an annual dividend of $0.19 per share and has a dividend yield of 0.3%. Cummins pays an annual dividend of $4.32 per share and has a dividend yield of 3.1%. Brunswick pays out 4.9% of its earnings in the form of a dividend. Cummins pays out 40.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Brunswick has increased its dividend for 5 consecutive years and Cummins has increased its dividend for 8 consecutive years. Cummins is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider and Institutional Ownership
94.5% of Brunswick shares are owned by institutional investors. Comparatively, 81.3% of Cummins shares are owned by institutional investors. 1.0% of Brunswick shares are owned by company insiders. Comparatively, 0.6% of Cummins shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Volatility and Risk
Brunswick has a beta of 1.84, indicating that its share price is 84% more volatile than the S&P 500. Comparatively, Cummins has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500.
Earnings & Valuation
This table compares Brunswick and Cummins’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Brunswick||$4.51 billion||1.33||$146.40 million||$3.89||17.71|
|Cummins||$20.43 billion||1.14||$999.00 million||$10.62||13.26|
Cummins has higher revenue and earnings than Brunswick. Cummins is trading at a lower price-to-earnings ratio than Brunswick, indicating that it is currently the more affordable of the two stocks.
Cummins beats Brunswick on 9 of the 17 factors compared between the two stocks.
Brunswick Corporation designs, manufactures, and markets recreation products worldwide. The company's Marine Engine segment offers outboard, sterndrive, and inboard engine and propulsion systems; marine electronics and control integration systems, steering systems, instruments, controls, propellers, trolling motors, fuel systems, service parts, and lubricants; and diesel propulsion systems to the recreational and commercial marine markets. It serves independent boat builders and governments through marine dealers and distributors, specialty marine retailers, and marine service centers under the Mercury, Mercury MerCruiser, Mariner, Mercury Racing, Mercury Diesel, Quicksilver, Mercury Precision Parts, Mercury Propellers, Attwood, Garelick, Whale, BLA, FulTyme RV, Talamex, Besto, Seachoice, and MotorGuide brands. The company's Boat segment offers boats, such as fiberglass pleasure, sport cruisers, sport fishing and center-console, offshore fishing, aluminum and fiberglass fishing, pontoon, utility, deck, inflatable, and heavy-gauge aluminum under the Bayliner, Heyday, Boston Whaler, Lund, Crestliner, Cypress Cay, Harris, Lowe, Princecraft, and Thunder Jet brands. This segment serves commercial and government customers through dealers and distributors. Its Fitness segment offers cardiovascular fitness equipment and strength-training equipment under the Life Fitness, Hammer Strength, Cybex, Indoor Cycling Group, and SCIFIT brands. This segment also offers billiards, table tennis, and air hockey tables, as well as game room furniture and related accessories under the Brunswick and Contender brands. This segment serves health clubs, corporations, schools and universities, hotels, professional sports teams, retirement and assisted living facilities, and the military and governmental agencies through dealers, distributors, specialty retailers, mass merchants, sporting goods stores, and its website. The company was founded in 1845 and is headquartered in Mettawa, Illinois.
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.
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