StreetAuthority | May 31, 2012 03:35AM ET
If I told you about a stock that's delivered gains of nearly 20% to investors for the past five years, then I imagine you'd be a little skeptical. After all, the past five years have been some of the most tumultuous years in recent memory. And even if it weren't, 20% a year is a pretty tough benchmark to meet.
Warren Buffett, Carl Icahn, Bill Ackman -- these guys would all kill to even come close to that, not to mention probably take on a lot of risk in the process.
They wouldn't have to, though, if they had just invested in one of the world's largest engine manufacturers. And best of all, as a technological leader in fuel efficiency and natural gas engines, it's poised to keep up the pace.
I'm talking about Cummins Inc. (NYSE: CMI).
With annual revenue of about $18 billion, the company makes diesel engines for construction vehicles, cars, buses and trucks. It also makes natural-gas engines, engine components and electric power-generation systems.
Shares of Cummins have climbed 124% during the past five years -- good for an annualized rate of return of 17.5%. Tack on the annual dividend yield, which has averaged 1.3% during the past five years, and you get a total return of 18.8%.
BY Tim Begany
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