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Cummins (CMI - Free Report)

Cummins is a leading global manufacturer of diesel and natural gas engines. They supply mainly to construction and mining industries.

The company reported excellent results for Q1, thanks to strong growth in international markets, particularly China. They derive almost 50% of their revenues from international markets so the stock is a play on improving global growth picture.

Both revenues and earnings came in ahead of our estimates and the management also raised their guidance for the year.

Analysts have been raising their estimates for the company after solid results. The company has beaten consistently in the past four quarters.

They have been returning a lot of cash to shareholders. In fact, the company plans to return at least 50% of its full-year operating cash flow to shareholders in the form of share repurchases and dividends. Their current dividend yield is 2.6%

CMI is a Zacks Rank #1 (Strong Buy) stock with industry rank in the top 2% and sector rank in top 6%. It has a style score of “B” for Growth and expected EPS growth rate of ~12%.

Big Five Sporting Goods (BGFV  - Free Report)

Big Five is a sporting goods retailer in the western US. 

The retailer reported much better-than-expected results for last quarter. They seem to have benefited from liquidation of Sports Authority and Sport Chalet, which were major competitors in the area.

Analysts have raised their estimates significantly after blockbuster results. The company has beaten estimates in all of last four quarters, with an average positive beat of 95%!

The retailer continues to return a lot of capital via dividends and buybacks. Last year in November, they had announced a 20% dividend increase. This was their second dividend increase in 2016 and a 50% increase in their dividend from the beginning of the year.

Their current dividend yield is 4.3%.

The stock has a Zacks Rank of 1 (Strong Buy) and it looks very good on style scores with “A” for Value and Growth as well as VGM. It has an expected EPS growth of 12%.