Analyzing Cummins (CMI) and Coates International (COTE)

Cummins (NYSE:CMI) and Coates International (OTCMKTS:COTE) are both auto/tires/trucks companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, profitability, dividends and earnings.

Analyst Ratings

This is a summary of current recommendations and price targets for Cummins and Coates International, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cummins 1 14 7 0 2.27
Coates International 0 0 0 0 N/A

Cummins currently has a consensus target price of $162.32, suggesting a potential upside of 16.32%. Given Cummins’ higher possible upside, research analysts plainly believe Cummins is more favorable than Coates International.

Dividends

Cummins pays an annual dividend of $4.56 per share and has a dividend yield of 3.3%. Coates International does not pay a dividend. Cummins pays out 42.9% of its earnings in the form of a dividend. Cummins has raised its dividend for 9 consecutive years.

Valuation & Earnings

This table compares Cummins and Coates International’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cummins $20.43 billion 1.10 $999.00 million $10.62 13.14
Coates International $10,000.00 18.31 -$8.38 million N/A N/A

Cummins has higher revenue and earnings than Coates International.

Volatility and Risk

Cummins has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500. Comparatively, Coates International has a beta of 0.26, indicating that its stock price is 74% less volatile than the S&P 500.

Profitability

This table compares Cummins and Coates International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cummins 5.57% 29.17% 12.83%
Coates International N/A N/A -246.98%

Insider & Institutional Ownership

80.4% of Cummins shares are held by institutional investors. 0.7% of Cummins shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Cummins beats Coates International on 12 of the 14 factors compared between the two stocks.

Cummins Company Profile

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.

Coates International Company Profile

Coates International, Ltd. develops and sells Coates Spherical Rotary Valve (CSRV) system technology for use in various piston-driven internal combustion engines in the United States and internationally. The company's CSRV system technology replaces the intake and exhausts conventional poppet valves used in various piston-driven stationary, automotive, motorcycle, and marine engines. Its CSRV system technology is used in various applications, including engines for electric power generators for home use, industrial complexes, and grid installations; and engines to power motorcycles, automobiles, light and heavy trucks, machinery, railroads, marine engines, military equipment, light aircraft, helicopters, lawn mowers, snowmobiles and jet skis, etc. Coates International, Ltd. was founded in 1988 and is headquartered in Wall Township, New Jersey.

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