Cummins

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Cummins ( CMI) manufactures diesel, hybrid, and natural gas engines, primarily for heavy trucks. The firm is a completely integrated heavy engine maker, building everything from the turbochargers to the power units and filtration systems used on its engines. That wider product net means lower costs for the engines that come out of CMI's factories and more selling opportunities outside of the OEM market.

It may seem surprising, but Cummins has been early to embrace the green movement, building itself up to become the biggest maker of natural gas-powered engines in the world. That's not just some sort of green lip service; in many cases, natural gas provides major economic benefits for truck operators, especially given the sustained low natgas prices that we've seen in the last couple of years.

The consumer business is also big for Cummins. Today, you can buy a Dodge Ram equipped with a Cummins turbo diesel engine -- an option that 80% of eligible Ram buyers opt for, largely because of the Cummins reputation as a serious truck engine. Engines for consumer trucks contribute around 10% of CMI's revenues right now, a major piece of CMI's business.

The firm yields only 1.65% at present, but investors should expect CMI's 40-cent quarterly payout to increase in the next quarter; we'll see if I'm right when the firm announces second-quarter earnings on July 31.

Cummins shows up on a list of 6 Stocks to Benefit From Truckers' Switch to Natural Gas.

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