Cummins (CMI) DIvidends Date & History

Key Takeaways

• Cummins Inc. (CMI) provides a forward dividend yield of about 1.2%, with quarterly payments of $2.00 per share, equating to an annualized $8.00.
• The company boasts a 20-year streak of consecutive dividend increases, with a 5-year average annual growth rate of around 8%.
• Payout ratio stands at approximately 37%, indicating strong sustainability supported by earnings coverage.
• Free cash flow and operating cash flow comfortably cover dividends, despite cyclical industry fluctuations.
• Dividend yield exceeds the machinery industry average of about 0.65%, making it attractive relative to peers.
• Recent ex-dividend date was February 20, 2026, with payment on March 5, 2026.

Dividend Overview

Cummins Inc. (CMI), a leading provider of power solutions including engines and related technologies, maintains a reliable quarterly dividend policy. The current forward annual dividend is $8.00 per share, yielding approximately 1.2% based on recent stock prices. Payments are made every three months, with the most recent ex-dividend date on February 20, 2026, and payment on March 5, 2026. This positions CMI as a dividend growth stock rather than a high-yield play, emphasizing consistent increases over yield maximization. The company's commitment to returning capital to shareholders aligns with its strong balance sheet in the cyclical machinery sector, appealing to investors seeking modest but growing income streams.

Dividend History and Growth

Cummins has demonstrated remarkable dividend consistency, achieving 20 consecutive years of increases as of recent announcements. The quarterly dividend was raised approximately 10% in July 2025 to $2.00 per share, building on prior growth. Over the past five years, dividends have grown at an average annual rate of 7.7-8%, outpacing inflation. Historical data shows no cuts, even through economic downturns, reflecting a long-term strategy of prudent capital allocation. Total dividends paid in fiscal 2025 reached $7.64 per share, up from $7.00 in 2024. This track record underscores CMI's focus on shareholder returns amid its evolution in power generation and electrification.

Dividend Sustainability and Payout Ratio

The dividend's sustainability is robust, with a payout ratio of 37.3%, well below levels that signal risk (typically over 60-70%). Earnings per share comfortably cover the payout, and free cash flow (FCF), while variable—$279 million in 2024 after $2.75 billion in 2023—historically supports distributions. Operating cash flow covers debt obligations adequately, with net debt-to-equity at 28.4% and debt well-covered at 48.8% by operating cash flow. Moderate debt levels and strong profitability in core engine and power systems segments bolster confidence in ongoing payments, even in a cyclical industry.

Dividend Compared to Industry Peers

In the machinery and industrial engines sector, CMI's 1.2% yield stands above the industry average of approximately 0.65%. Peers like Caterpillar (CAT), with a yield around 1.1-1.3%, and PACCAR (PCAR) at about 1.1%, offer similar profiles, emphasizing growth over high yields. Deere & Co. (DE) trails with a lower yield, highlighting CMI's competitive positioning for income-focused investors in heavy equipment and power solutions.

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Is This Stock Attractive for Dividend Investors?

Cummins Inc. (CMI) suits dividend growth investors who prioritize consistent raises and low payout ratios over sky-high yields. Its 20-year streak and 8% average growth rate appeal to those building long-term income portfolios, especially in the resilient industrial sector. Conservative investors may appreciate the earnings and cash flow coverage amid economic cycles, though the modest 1.2% yield may not excite pure income seekers. Long-term holders benefit from CMI's diversification into electrification and power systems, potentially supporting future hikes. However, exposure to trucking and manufacturing volatility warrants diversification. Overall, it fits balanced portfolios valuing reliability over aggressive yields.

Disclaimer

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