Home > Comparison > Industrials > CMI vs IEX
The strategic rivalry between Cummins Inc. and IDEX Corporation shapes the Industrials sector’s machinery landscape. Cummins operates as a capital-intensive giant, manufacturing engines and power systems worldwide. In contrast, IDEX focuses on specialized fluid and metering technologies with diversified applications. This analysis pits scale against specialization to identify which model delivers superior risk-adjusted returns. I aim to clarify which path best enhances a diversified portfolio’s resilience and growth potential.
Table of contents
Companies Overview
Cummins Inc. and IDEX Corporation stand as key players in the industrial machinery market with distinct operational footprints.
Cummins Inc.: Global Powertrain Leader
Cummins Inc. dominates as a designer and manufacturer of diesel and natural gas engines alongside electric and hybrid powertrains. Its core revenue comes from engines, power systems, and related components serving diverse heavy-duty sectors worldwide. In 2026, Cummins focuses strategically on expanding electrified power systems and emission solutions to capture evolving clean energy demand.
IDEX Corporation: Applied Solutions Specialist
IDEX Corporation excels in delivering applied fluidics, metering, and safety products through three segments: Fluid & Metering Technologies, Health & Science Technologies, and Fire & Safety/Diversified Products. Its revenue is driven by precision pumps and engineered components targeting industrial, pharmaceutical, and emergency services. The strategic focus in 2026 centers on innovation across fluid handling and safety solutions for niche markets.
Strategic Collision: Similarities & Divergences
Both firms thrive in industrial machinery but differ in philosophy: Cummins pursues a broad powertrain ecosystem, while IDEX specializes in precision fluidics and safety products. They compete primarily in engineered components and systems but serve different vertical niches. Their investment profiles diverge significantly—Cummins offers scale and diversification, whereas IDEX delivers focused, high-margin specialty solutions.
Income Statement Comparison
This data dissects the core profitability and scalability of both corporate engines to reveal who dominates the bottom line:
| Metric | Cummins Inc. (CMI) | IDEX Corporation (IEX) |
|---|---|---|
| Revenue | 33.7B | 3.46B |
| Cost of Revenue | 25.2B | 1.92B |
| Operating Expenses | 4.52B | 819M |
| Gross Profit | 8.52B | 1.54B |
| EBITDA | 5.39B | 903M |
| EBIT | 4.29B | 697M |
| Interest Expense | 329M | 64M |
| Net Income | 2.84B | 483M |
| EPS | 20.62 | 6.41 |
| Fiscal Year | 2025 | 2025 |
Income Statement Analysis: The Bottom-Line Duel
This income statement comparison reveals which company converts revenue into profit with superior efficiency and momentum.
Cummins Inc. Analysis
Cummins posted a revenue peak near $34B in 2024 but slipped slightly to $33.7B in 2025. Net income followed a similar pattern, dropping from $3.95B to $2.84B. Gross margin remains healthy at 25.3%, though net margin declined to 8.4%, reflecting margin pressure and reduced efficiency in the latest year.
IDEX Corporation Analysis
IDEX steadily grew revenue by nearly 6% in 2025 to $3.46B, with net income decreasing modestly to $483M. It boasts a strong gross margin of 44.5% and a net margin of 14.0%, outperforming Cummins on profitability ratios. Operating income and EPS show resilient momentum despite a slight margin contraction.
Margin Strength vs. Scale Advantage
IDEX delivers superior margin efficiency and stable revenue growth, while Cummins commands a much larger revenue scale but faces margin compression. For investors prioritizing profitability and operational leverage, IDEX presents a more attractive profile. Cummins’s scale offers growth potential but with increased margin volatility.
Financial Ratios Comparison
These vital ratios act as a diagnostic tool to expose the underlying fiscal health, valuation premiums, and capital efficiency of the companies compared below:
| Ratios | Cummins Inc. (CMI) | IDEX Corporation (IEX) |
|---|---|---|
| ROE | 23.0% | 12.0% |
| ROIC | 12.0% | 8.6% |
| P/E | 24.8 | 27.7 |
| P/B | 5.7 | 3.3 |
| Current Ratio | 1.76 | 2.86 |
| Quick Ratio | 1.16 | 2.02 |
| D/E | 0.59 | 0.00 |
| Debt-to-Assets | 21.3% | 0.01% |
| Interest Coverage | 12.1 | 11.2 |
| Asset Turnover | 0.99 | 0.50 |
| Fixed Asset Turnover | 4.84 | 7.39 |
| Payout ratio | 37.1% | 44.0% |
| Dividend yield | 1.50% | 1.59% |
| Fiscal Year | 2025 | 2025 |
Efficiency & Valuation Duel: The Vital Signs
Ratios act as a company’s DNA, unlocking insights into hidden risks and operational excellence behind the surface numbers.
Cummins Inc.
Cummins delivers strong profitability with a 23% ROE and favorable 12% ROIC, signaling efficient capital use. The stock trades at a neutral P/E of 24.8 but shows an unfavorable high P/B of 5.7, suggesting valuation stretch. Dividend yield stands at 1.5%, reflecting a balanced approach between shareholder returns and reinvestment in R&D (4.1% of revenue).
IDEX Corporation
IDEX posts a higher net margin of 14% but a moderate 12% ROE, reflecting solid yet less efficient equity use. Its P/E at 27.7 and P/B at 3.3 mark the stock as expensive relative to peers. The company maintains a 1.6% dividend yield with no debt and invests heavily in intangibles, hinting at growth via innovation rather than leverage.
Valuation Stretch vs. Operational Efficiency
Both companies show slightly favorable overall ratios but differ in key areas. Cummins pairs stronger profitability and capital returns with a stretched book valuation, while IDEX trades expensive on earnings with lower asset turnover. Investors seeking operational efficiency may lean toward Cummins, whereas those favoring growth and stability could prefer IDEX’s low leverage profile.
Which one offers the Superior Shareholder Reward?
Cummins Inc. (CMI) pays a higher dividend yield around 2.7% in 2023 but has a payout ratio exceeding 100%, signaling payout risk. IDEX Corporation (IEX) yields about 1.6% with a sustainable payout near 44%. Both execute modest buybacks, but IEX’s free cash flow coverage exceeds 90%, supporting durable buybacks and dividends. CMI’s free cash flow coverage varies widely, threatening its payout stability. IEX’s lower leverage and stronger cash ratios underpin a safer, growth-oriented distribution model. I see IEX offering a superior total shareholder reward in 2026, balancing yield and sustainable capital returns.
Comparative Score Analysis: The Strategic Profile
The radar chart reveals the fundamental DNA and trade-offs of both firms, spotlighting where each excels and concedes:
Cummins Inc. (CMI) boasts superior profitability metrics with a very favorable ROE score of 5 and a strong ROA of 4. IDEX Corporation (IEX) edges ahead in discounted cash flow valuation (score 4 vs. 3) and maintains a more balanced valuation profile, scoring better in price-to-book (2 vs. 1). Both struggle equally on debt-to-equity (score 2), signaling elevated leverage risk. CMI relies heavily on operational efficiency, while IEX demonstrates a steadier valuation approach.
Bankruptcy Risk: Solvency Showdown
The Altman Z-Score difference illustrates both companies remain in the safe zone, with IDEX (5.23) showing a marginally stronger buffer than Cummins (4.77):
This suggests both have robust financial structures to withstand cyclical downturns, but IDEX’s higher score provides a slight edge in long-term survival confidence.
Financial Health: Quality of Operations
IDEX outperforms Cummins on Piotroski F-Score, demonstrating stronger internal financial health (8 vs. 5):
IDEX’s very strong score signals solid profitability and balance sheet metrics. Cummins’ average score flags potential red flags in operational efficiency or leverage, warranting caution despite its profitability strengths.
How are the two companies positioned?
This section dissects Cummins and IDEX’s operational DNA by comparing revenue distribution and internal strengths and weaknesses. The goal is to confront their economic moats to identify which model delivers the most resilient competitive advantage today.
Revenue Segmentation: The Strategic Mix
The following visual comparison dissects how Cummins Inc. and IDEX Corporation diversify their income streams and where their primary sector bets lie:
Cummins Inc. anchors its revenue around Engines ($11.7B) and Components ($11.7B), showing a strong focus on heavy industrial products. IDEX Corporation, however, exhibits a more balanced mix across Health & Science Technologies ($1.3B), Fluid & Metering Technologies ($1.2B), and Fire & Safety Products ($0.7B). Cummins’ concentration signals infrastructure dominance but faces concentration risk. IDEX’s diversification supports resilience and broad market exposure.
Strengths and Weaknesses Comparison
This table compares the Strengths and Weaknesses of Cummins Inc. and IDEX Corporation:
Cummins Inc. Strengths
- Strong profitability with 23.02% ROE and 12.01% ROIC
- Favorable liquidity ratios (current 1.76, quick 1.16)
- Diversified revenue streams across Components, Distribution, Engine, and Power Systems
- Significant global presence with $19.4B US and $9.95B non-US revenue
- High fixed asset turnover of 4.84 indicates efficient asset use
IDEX Corporation Strengths
- Higher net margin at 13.98% signaling better operational efficiency
- Strong liquidity with current ratio 2.86 and quick ratio 2.02
- Debt-free capital structure (D/E 0.0) reducing financial risk
- Diversified product segments in Health, Safety, and Fluid technologies
- Good global footprint with $1.62B US and diversified Asia and Europe revenues
- High fixed asset turnover of 7.39 shows excellent asset productivity
Cummins Inc. Weaknesses
- Price-to-book ratio at 5.7 is relatively high, possibly indicating overvaluation
- Moderate net margin of 8.44%, lower than IDEX
- Neutral debt level (D/E 0.59) could constrain flexibility
- Market share details not explicit, limiting assessment
- Pe ratio neutral but higher than some benchmarks
IDEX Corporation Weaknesses
- Elevated PE of 27.73 and PB of 3.33 suggest valuation concerns
- Asset turnover at 0.5 is weak, indicating lower efficiency in asset use
- ROE and ROIC at neutral levels, trailing Cummins
- Slightly higher unfavorable ratios at 21.43% than Cummins
- Smaller scale and US-centric revenue base compared to Cummins
Overall, Cummins shows robust profitability and a broad global and product footprint, balanced by valuation caution. IDEX stands out for operational margin and liquidity but faces challenges in valuation and asset efficiency. These contrasts highlight differing strategic focuses and risk profiles.
The Moat Duel: Analyzing Competitive Defensibility
A structural moat is the only barrier protecting long-term profits from relentless competition erosion. Let’s dissect the sources of durable advantage for these two industrial players:
Cummins Inc.: Intangible Assets and Integrated Power Solutions
Cummins leverages deep engineering expertise and a broad product ecosystem, reflected in stable 25% gross margins and 8.4% net margins. Its slight ROIC decline warns of margin pressure, but new electrified powertrain innovations could reinforce its moat in 2026.
IDEX Corporation: Niche Technological Expertise and Diverse Fluidics
IDEX’s moat stems from specialized fluid handling technologies and diversified end markets, enabling superior 44.5% gross margins and 14% net margins. However, its negative ROIC vs. WACC signals value erosion, demanding strategic shifts to maintain advantage amid evolving industrial needs.
Verdict: Integrated Power Ecosystem vs. Specialized Fluidics Innovation
Cummins holds the deeper moat with sustained value creation despite a slight ROIC dip. IDEX’s shrinking returns highlight urgent risks. Cummins is better equipped to defend and expand its market share in 2026.
Which stock offers better returns?
The past year reveals sharply divergent stock trajectories, with Cummins Inc. surging over 110% amid accelerating momentum, while IDEX Corporation’s shares declined near 12%, despite a recent rebound.
Trend Comparison
Cummins Inc. shows a strong bullish trend over 12 months, with a 110.21% gain and accelerating price increases. Volatility is high, indicated by a 79.49 standard deviation.
IDEX Corporation exhibits a bearish trend over the same period, with an 11.92% decline accelerating downward. Recent recovery lifted the price by 23.86%, but overall momentum remains negative.
Comparatively, Cummins Inc. outperformed IDEX Corporation substantially, delivering the highest market returns and stronger sustained momentum throughout the year.
Target Prices
Analysts present a constructive target consensus for both Cummins Inc. and IDEX Corporation.
| Company | Target Low | Target High | Consensus |
|---|---|---|---|
| Cummins Inc. | 540 | 703 | 606.1 |
| IDEX Corporation | 220 | 247 | 236.2 |
Cummins’ consensus target of 606.1 exceeds its current price of 577.73, signaling moderate upside potential. IDEX’s consensus target at 236.2 also surpasses its current price of 211.37, reflecting positive analyst expectations.
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How do institutions grade them?
Cummins Inc. Grades
The following table summarizes recent institutional grades for Cummins Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Truist Securities | Maintain | Buy | 2026-02-06 |
| Wolfe Research | Downgrade | Peer Perform | 2026-01-26 |
| Barclays | Maintain | Overweight | 2026-01-23 |
| Wells Fargo | Maintain | Overweight | 2026-01-23 |
| JP Morgan | Maintain | Neutral | 2026-01-14 |
| Citigroup | Maintain | Buy | 2026-01-13 |
| Raymond James | Upgrade | Outperform | 2025-12-22 |
| Barclays | Upgrade | Overweight | 2025-12-19 |
| Truist Securities | Maintain | Buy | 2025-12-18 |
| Citigroup | Maintain | Buy | 2025-12-11 |
IDEX Corporation Grades
The following table summarizes recent institutional grades for IDEX Corporation:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Argus Research | Upgrade | Buy | 2026-02-06 |
| TD Cowen | Maintain | Buy | 2026-02-05 |
| Citigroup | Maintain | Buy | 2026-02-05 |
| DA Davidson | Maintain | Neutral | 2026-02-05 |
| RBC Capital | Maintain | Outperform | 2026-02-05 |
| Stifel | Maintain | Buy | 2026-01-23 |
| Citigroup | Maintain | Buy | 2025-12-08 |
| RBC Capital | Maintain | Outperform | 2025-10-30 |
| Stifel | Maintain | Buy | 2025-10-20 |
| Oppenheimer | Maintain | Outperform | 2025-10-07 |
Which company has the best grades?
IDEX Corporation consistently earns “Buy” and “Outperform” ratings, showing strong institutional confidence. Cummins Inc. holds mostly “Buy” and “Overweight” grades but includes some downgrades and “Neutral” ratings. Investors may view IDEX as having more favorable analyst sentiment.
Risks specific to each company
The following categories identify critical pressure points and systemic threats facing Cummins Inc. and IDEX Corporation in the 2026 market environment:
1. Market & Competition
Cummins Inc.
- Faces intense competition in heavy machinery and powertrain markets, with pressure to innovate in electrification and emissions solutions.
IDEX Corporation
- Competes in niche industrial segments with diversified applications but limited scale compared to larger industrial peers.
2. Capital Structure & Debt
Cummins Inc.
- Moderate leverage (D/E 0.59) with solid interest coverage (13.05); balance sheet is stable but debt level requires monitoring.
IDEX Corporation
- Virtually no debt (D/E 0.0), very strong liquidity, presenting a low financial risk profile.
3. Stock Volatility
Cummins Inc.
- Beta of 1.12 suggests higher volatility than market; wide trading range indicates sensitivity to cyclicality.
IDEX Corporation
- Beta near 0.98 shows stock moves roughly in line with market, indicating more stable price behavior.
4. Regulatory & Legal
Cummins Inc.
- Subject to stringent emissions and environmental regulations impacting product development costs and timelines.
IDEX Corporation
- Faces regulatory risks mainly in health, safety, and environmental standards across diverse product lines.
5. Supply Chain & Operations
Cummins Inc.
- Complex global supply chain for engines and components exposes it to raw material price swings and logistic disruptions.
IDEX Corporation
- Smaller scale supply chain but diversity of product segments may complicate operational efficiency and inventory management.
6. ESG & Climate Transition
Cummins Inc.
- Investing heavily in electrification and hydrogen; must balance legacy diesel business with climate goals.
IDEX Corporation
- ESG focus growing; exposure to fluid handling and safety products benefits from sustainability trends but requires ongoing innovation.
7. Geopolitical Exposure
Cummins Inc.
- Significant global footprint exposes it to trade tensions, tariffs, and geopolitical instability in key markets.
IDEX Corporation
- More concentrated North American focus reduces geopolitical risk but limits growth opportunities abroad.
Which company shows a better risk-adjusted profile?
Cummins’ most pressing risk is its exposure to regulatory and supply chain complexities amid a cyclical industrial backdrop. IDEX’s main risk lies in market niche constraints and higher valuation multiples. IDEX’s pristine balance sheet and lower stock volatility favor a better risk-adjusted profile. Its Altman Z-Score and Piotroski Score also indicate stronger financial health. I note IDEX’s recent maintenance of zero debt and very strong Piotroski Score underscores its superior financial resilience relative to Cummins.
Final Verdict: Which stock to choose?
Cummins Inc. (CMI) stands out with its superpower of robust capital efficiency, consistently generating returns well above its cost of capital. This strength supports its value creation despite a slight decline in profitability, making it a solid candidate for portfolios aiming at long-term, aggressive growth. A point of vigilance remains its stretched valuation metrics, which could pressure upside.
IDEX Corporation (IEX) commands a strategic moat through its high-margin, recurring revenue streams and exceptionally strong balance sheet liquidity. Its lower capital intensity and safer debt profile offer a more stable investment backdrop compared to Cummins. This positions IEX as attractive for investors seeking growth at a reasonable price with enhanced financial safety.
If you prioritize aggressive growth driven by efficient capital use and value creation, Cummins Inc. is the compelling choice due to its superior ROIC and bullish price momentum. However, if you seek steadier growth with a strong moat and better balance sheet stability, IDEX offers better stability despite its premium valuation and recent bearish longer-term trend.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Cummins Inc. and IDEX Corporation to enhance your investment decisions:
