Cummins (CMI) DIvidends Date & History

Key Takeaways

• Cummins pays a quarterly dividend of $2.20 per share, an annualized $8.80, for a dividend yield of roughly 1.5%.
• The company has raised its dividend for about two decades, most recently lifting the quarterly payout by 10% in 2026.
• The payout ratio is approximately 40% of earnings and roughly 25% of free cash flow, indicating a comfortably funded dividend.
• Over the past five years, the dividend has compounded at a high-single-digit annual rate, blending income with steady growth.
• The yield is modest compared with some industrial peers, making this a dividend growth story rather than a high-yield one.

Dividend Overview

Cummins Inc. (CMI), a global leader in engines, power systems, and related components, pays a quarterly cash dividend. Following a July 2026 increase to $2.20 per share, the annualized dividend stands at $8.80, translating to a dividend yield of roughly 1.5% based on recent share prices. The most recent payment was made on September 3, 2026, with an ex-dividend date of August 21, 2026. Cummins is best characterized as a dividend growth stock: its yield is not especially high, but the company has demonstrated a long, consistent record of raising its payout. For investors, Cummins offers a combination of modest current income, disciplined cash management, and a history of compounding dividend increases, rather than the elevated yield associated with more mature, slower-growth industrial income names.

Dividend History and Growth

Cummins has paid a dividend for roughly four decades and has increased it consistently for approximately two decades, a track record that places it among the more dependable dividend payers in the industrial sector. Quarterly payouts have climbed from $1.45 per share in 2021 to $2.20 per share by mid-2026. The latest increase, from $2.00 to $2.20 per share, represented a 10% hike and marked a meaningful step-up in the company's return of capital to shareholders. Over the past five years, the dividend has grown at a high-single-digit annualized pace, and the trailing one-year growth rate is close to 10%. This consistency reflects a long-term strategy of rewarding shareholders while retaining sufficient capital to fund research, product development, and the company's strategic initiatives in areas such as electrification and clean power.

Dividend Sustainability and Payout Ratio

Cummins' dividend appears well covered. The company pays out roughly 40% of its earnings as dividends, leaving a substantial buffer to absorb cyclical downturns in demand for engines and power systems. On a cash-flow basis, the dividend consumes approximately 25% of free cash flow (the cash a business generates after funding its operations and capital investments), which further supports the sustainability of the payout. This conservative payout ratio gives management flexibility to continue raising the dividend while also investing in growth and maintaining a solid balance sheet. For dividend investors, a payout ratio well below 75% is generally viewed as a sign of safety, and Cummins sits comfortably within that range, indicating the dividend is unlikely to be at risk in the near term.

Dividend Compared to Industry Peers

Within the industrial and auto/truck component space, Cummins' dividend yield is modest. Peers such as Illinois Tool Works (ITW), Autoliv (ALV), and Lear Corporation (LEA) typically offer yields in the low- to mid-2% range, above Cummins' roughly 1.5%. However, Cummins differentiates itself through its dividend growth streak and disciplined payout ratio. Where some higher-yielding peers trade income for slower payout growth, Cummins has paired a sustainable yield with consistent, meaningful annual increases. For this reason, Cummins is often viewed as a quality growth-and-income holding within the industrial sector: its headline yield understates the long-term value of a payout that has compounded steadily for two decades.

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Is This Stock Attractive for Dividend Investors?

Cummins may appeal most to dividend growth investors and long-term, total-return-oriented investors rather than those seeking immediate high income. With a yield of roughly 1.5%, it does not rank among the highest-yielding industrial names, so investors who prioritize current cash flow above all else may find better options elsewhere in the sector. However, the company's roughly two-decade streak of dividend increases, its conservative payout ratio of about 40% of earnings, and its strong free cash flow coverage make it an appealing candidate for investors focused on growing their income stream over time. The cyclical nature of Cummins' end markets, which include trucking, construction, and power generation, means earnings and cash flow can fluctuate with economic conditions, though the low payout ratio provides a cushion during downturns. Overall, Cummins fits a growth-and-income profile rather than a pure income or pure yield strategy.

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