17 Feb 2016: Bought 25 shares of CMI at $100.07 per share.
Founded in 1919 and headquartered in Columbus, Indiana, CMI (NYSE:CMI) is one of the leading designers and manufacturers of diesel engines. The company also produces natural gas engines and engine components and subsystems. CMI sells its products to original equipment manufacturers, distributors, and other customers worldwide.
CMI is ranked 2nd in the January 2016 edition of my 10 Dividend Growth Stocks article series. The company has a 10-year streak of consecutive dividend increases and pays quarterly dividends of 97.5¢ per share in the months of March, June, September and December.
I already own 19 shares of CMI, which I bought in April 2015 at $134.62 per share and at an initial yield on cost (YoC) of 2.32%.
With this buy I'm adding 25 shares at $100.07 per share, for an initial YoC of 3.90%. In the process, I'm adding $97.50 in expected dividend income to DivGro's projected annual dividend income, which currently stands at $8,512.11.
CMI's share price has declined about 39% since recording an all time high in June 2014, affording me an opportunity to reduce my overall cost basis. The average cost basis for the 44 shares I now own is $114.99.
The following chart shows CMI's recent price history along with my buy prices.
What makes CMI attractive for me is the 5-yr growth rate of 32%! Here are some additional statistics of CMI:The following chart shows CMI's dividend payments and EPS over the last 10 years. Earnings growth is solid and it is evident that the company's growing dividend is sufficiently covered:
• Cummins Inc. (NYSE:CMI)
streak 10 yrs | 5-yr growth rate 32.0% | yield 3.99%@ $97.66
payout 42% | debt 21% | moat narrow | credit rating A+
Updated ratings for CMI
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