CINTAS CORP (CTAS) Stock Fundamental Analysis
NASDAQ:CTAS - Nasdaq - US1729081059 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to CTAS. CTAS was compared to 84 industry peers in the Commercial Services & Supplies industry. CTAS has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. While showing a medium growth rate, CTAS is valued expensive at the moment. These ratings could make CTAS a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
In the past year CTAS was profitable.
CTAS had a positive operating cash flow in the past year.
In the past 5 years CTAS has always been profitable.
In the past 5 years CTAS always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 18.44%, CTAS belongs to the top of the industry, outperforming 95.18% of the companies in the same industry.
CTAS has a better Return On Equity (38.59%) than 95.18% of its industry peers.
The Return On Invested Capital of CTAS (23.98%) is better than 96.39% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CTAS is significantly above the industry average of 11.67%.
The last Return On Invested Capital (23.98%) for CTAS is above the 3 year average (20.29%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.44% | ||
| ROE | 38.59% | ||
| ROIC | 23.98% |
ROA(3y)15.96%
ROA(5y)14.52%
ROE(3y)36.06%
ROE(5y)32.99%
ROIC(3y)20.29%
ROIC(5y)18.5%
1.3 Margins
The Profit Margin of CTAS (17.47%) is better than 90.36% of its industry peers.
In the last couple of years the Profit Margin of CTAS has grown nicely.
With an excellent Operating Margin value of 22.77%, CTAS belongs to the best of the industry, outperforming 96.39% of the companies in the same industry.
CTAS's Operating Margin has improved in the last couple of years.
CTAS has a better Gross Margin (49.92%) than 86.75% of its industry peers.
CTAS's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.77% | ||
| PM (TTM) | 17.47% | ||
| GM | 49.92% |
OM growth 3Y3.33%
OM growth 5Y5.29%
PM growth 3Y1.71%
PM growth 5Y5.13%
GM growth 3Y1.59%
GM growth 5Y1.47%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), CTAS is creating value.
Compared to 1 year ago, CTAS has more shares outstanding
CTAS has more shares outstanding than it did 5 years ago.
The debt/assets ratio for CTAS has been reduced compared to a year ago.
2.2 Solvency
CTAS has an Altman-Z score of 14.10. This indicates that CTAS is financially healthy and has little risk of bankruptcy at the moment.
CTAS has a Altman-Z score of 14.10. This is amongst the best in the industry. CTAS outperforms 95.18% of its industry peers.
The Debt to FCF ratio of CTAS is 1.36, which is an excellent value as it means it would take CTAS, only 1.36 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of CTAS (1.36) is better than 81.93% of its industry peers.
A Debt/Equity ratio of 0.44 indicates that CTAS is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.44, CTAS perfoms like the industry average, outperforming 56.63% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.44 | ||
| Debt/FCF | 1.36 | ||
| Altman-Z | 14.1 |
ROIC/WACC2.69
WACC8.91%
2.3 Liquidity
A Current Ratio of 1.72 indicates that CTAS should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.72, CTAS is in the better half of the industry, outperforming 60.24% of the companies in the same industry.
CTAS has a Quick Ratio of 1.50. This is a normal value and indicates that CTAS is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.50, CTAS is in line with its industry, outperforming 59.04% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.72 | ||
| Quick Ratio | 1.5 |
3. Growth
3.1 Past
CTAS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 19.27%, which is quite good.
Measured over the past years, CTAS shows a quite strong growth in Earnings Per Share. The EPS has been growing by 14.78% on average per year.
Looking at the last year, CTAS shows a small growth in Revenue. The Revenue has grown by 7.79% in the last year.
CTAS shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.84% yearly.
EPS 1Y (TTM)19.27%
EPS 3Y13.92%
EPS 5Y14.78%
EPS Q2Q%17.71%
Revenue 1Y (TTM)7.79%
Revenue growth 3Y10.48%
Revenue growth 5Y6.84%
Sales Q2Q%8.44%
3.2 Future
The Earnings Per Share is expected to grow by 11.83% on average over the next years. This is quite good.
Based on estimates for the next years, CTAS will show a small growth in Revenue. The Revenue will grow by 7.67% on average per year.
EPS Next Y18.29%
EPS Next 2Y14.25%
EPS Next 3Y12.71%
EPS Next 5Y11.83%
Revenue Next Year7.37%
Revenue Next 2Y7.28%
Revenue Next 3Y7.15%
Revenue Next 5Y7.67%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 49.87, the valuation of CTAS can be described as expensive.
The rest of the industry has a similar Price/Earnings ratio as CTAS.
Compared to an average S&P500 Price/Earnings ratio of 27.30, CTAS is valued quite expensively.
CTAS is valuated quite expensively with a Price/Forward Earnings ratio of 43.60.
CTAS's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.76, CTAS is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 49.87 | ||
| Fwd PE | 43.6 |
4.2 Price Multiples
CTAS's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. CTAS is more expensive than 63.86% of the companies in the same industry.
CTAS's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 47.61 | ||
| EV/EBITDA | 31.9 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates CTAS does not grow enough to justify the current Price/Earnings ratio.
CTAS has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as CTAS's earnings are expected to grow with 12.71% in the coming years.
PEG (NY)2.73
PEG (5Y)3.37
EPS Next 2Y14.25%
EPS Next 3Y12.71%
5. Dividend
5.1 Amount
CTAS has a yearly dividend return of 0.72%, which is pretty low.
Compared to an average industry Dividend Yield of 2.45, CTAS pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.72, CTAS pays less dividend than the S&P500 average, which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.72% |
5.2 History
The dividend of CTAS decreases each year by -0.11%.
CTAS has been paying a dividend for at least 10 years, so it has a reliable track record.
CTAS has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)-0.11%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
CTAS pays out 33.37% of its income as dividend. This is a sustainable payout ratio.
DP33.37%
EPS Next 2Y14.25%
EPS Next 3Y12.71%
215.44
-1.12 (-0.52%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners67.28%
Inst Owner Change0%
Ins Owners1.72%
Ins Owner Change-0.02%
Market Cap86.99B
Analysts70.37
Price Target218.01 (1.19%)
Short Float %1.18%
Short Ratio2.8
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.72% |
Yearly Dividend2.1
Dividend Growth(5Y)-0.11%
DP33.37%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)5.13%
Min EPS beat(2)4.93%
Max EPS beat(2)5.32%
EPS beat(4)4
Avg EPS beat(4)6.62%
Min EPS beat(4)3.09%
Max EPS beat(4)13.14%
EPS beat(8)7
Avg EPS beat(8)4.26%
EPS beat(12)11
Avg EPS beat(12)3.79%
EPS beat(16)15
Avg EPS beat(16)4.52%
Revenue beat(2)0
Avg Revenue beat(2)-1.77%
Min Revenue beat(2)-2.04%
Max Revenue beat(2)-1.5%
Revenue beat(4)0
Avg Revenue beat(4)-1.77%
Min Revenue beat(4)-2.04%
Max Revenue beat(4)-1.5%
Revenue beat(8)0
Avg Revenue beat(8)-1.37%
Revenue beat(12)3
Avg Revenue beat(12)-0.63%
Revenue beat(16)4
Avg Revenue beat(16)-0.61%
PT rev (1m)0.74%
PT rev (3m)2.19%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.12%
EPS NY rev (1m)0%
EPS NY rev (3m)1.48%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)0%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 49.87 | ||
| Fwd PE | 43.6 | ||
| P/S | 8.58 | ||
| P/FCF | 47.61 | ||
| P/OCF | 39.13 | ||
| P/B | 18.94 | ||
| P/tB | 116.1 | ||
| EV/EBITDA | 31.9 |
EPS(TTM)4.32
EY2.01%
EPS(NY)4.94
Fwd EY2.29%
FCF(TTM)4.52
FCFY2.1%
OCF(TTM)5.51
OCFY2.56%
SpS25.12
BVpS11.37
TBVpS1.86
PEG (NY)2.73
PEG (5Y)3.37
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.44% | ||
| ROE | 38.59% | ||
| ROCE | 30.12% | ||
| ROIC | 23.98% | ||
| ROICexc | 24.76% | ||
| ROICexgc | 51.32% | ||
| OM | 22.77% | ||
| PM (TTM) | 17.47% | ||
| GM | 49.92% | ||
| FCFM | 18.01% |
ROA(3y)15.96%
ROA(5y)14.52%
ROE(3y)36.06%
ROE(5y)32.99%
ROIC(3y)20.29%
ROIC(5y)18.5%
ROICexc(3y)20.86%
ROICexc(5y)19.2%
ROICexgc(3y)43.4%
ROICexgc(5y)41.05%
ROCE(3y)25.49%
ROCE(5y)23.23%
ROICexcg growth 3Y2.7%
ROICexcg growth 5Y9.17%
ROICexc growth 3Y7.28%
ROICexc growth 5Y9.85%
OM growth 3Y3.33%
OM growth 5Y5.29%
PM growth 3Y1.71%
PM growth 5Y5.13%
GM growth 3Y1.59%
GM growth 5Y1.47%
F-Score8
Asset Turnover1.06
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.44 | ||
| Debt/FCF | 1.36 | ||
| Debt/EBITDA | 0.72 | ||
| Cap/Depr | 81.31% | ||
| Cap/Sales | 3.91% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 79.48% | ||
| Profit Quality | 103.1% | ||
| Current Ratio | 1.72 | ||
| Quick Ratio | 1.5 | ||
| Altman-Z | 14.1 |
F-Score8
WACC8.91%
ROIC/WACC2.69
Cap/Depr(3y)77.9%
Cap/Depr(5y)66.29%
Cap/Sales(3y)3.7%
Cap/Sales(5y)3.27%
Profit Quality(3y)102.17%
Profit Quality(5y)107.82%
High Growth Momentum
Growth
EPS 1Y (TTM)19.27%
EPS 3Y13.92%
EPS 5Y14.78%
EPS Q2Q%17.71%
EPS Next Y18.29%
EPS Next 2Y14.25%
EPS Next 3Y12.71%
EPS Next 5Y11.83%
Revenue 1Y (TTM)7.79%
Revenue growth 3Y10.48%
Revenue growth 5Y6.84%
Sales Q2Q%8.44%
Revenue Next Year7.37%
Revenue Next 2Y7.28%
Revenue Next 3Y7.15%
Revenue Next 5Y7.67%
EBIT growth 1Y15.97%
EBIT growth 3Y14.15%
EBIT growth 5Y12.5%
EBIT Next Year38.74%
EBIT Next 3Y17.94%
EBIT Next 5Y14.42%
FCF growth 1Y41%
FCF growth 3Y11.13%
FCF growth 5Y16.12%
OCF growth 1Y39.41%
OCF growth 3Y15.19%
OCF growth 5Y14.26%