Why Cummins (CMI) is a Top Dividend Stock for Your Portfolio

Company Overview - Cummins (CMI) is headquartered in Columbus and operates in the Auto-Tires-Trucks sector, experiencing a price change of 40.05% year-to-date [2] - The company currently pays a dividend of $1.82 per share, resulting in a dividend yield of 2.17%, which is higher than the Automotive - Internal Combustion Engines industry's yield of 1.08% and the S&P 500's yield of 1.51% [2] Dividend Performance - Cummins has increased its annualized dividend to $7.28, marking a 12% increase from the previous year [2] - Over the past five years, the company has raised its dividend four times, achieving an average annual increase of 7.11% [2] - The current payout ratio for Cummins is 35%, indicating that the company distributes 35% of its trailing 12-month earnings per share as dividends [2] Earnings Growth - The Zacks Consensus Estimate for Cummins' earnings per share in 2024 is $19.96, reflecting a year-over-year growth rate of 1.37% [3] Investment Considerations - Dividends are favored by investors for various reasons, including improving stock investing profits and providing tax advantages [4] - Established firms with secure profits are typically viewed as the best dividend options, while high-growth businesses and tech start-ups rarely offer dividends [4] - Cummins is identified as a compelling investment opportunity due to its strong dividend profile and current Zacks Rank of 3 (Hold) [4]