190.34 USD
+1.18 (+0.62%)
We assign a fundamental rating of 7 out of 10 to CTAS. CTAS was compared to 80 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. This makes CTAS very considerable for quality investing!
1. Profitability
1.1 Basic Checks
- CTAS had positive earnings in the past year.
- CTAS had a positive operating cash flow in the past year.
- In the past 5 years CTAS has always been profitable.
- Each year in the past 5 years CTAS had a positive operating cash flow.
1.2 Ratios
- Looking at the Return On Assets, with a value of 18.67%, CTAS belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
- The Return On Equity of CTAS (42.46%) is better than 96.25% of its industry peers.
- CTAS's Return On Invested Capital of 24.58% is amongst the best of the industry. CTAS outperforms 98.75% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for CTAS is significantly above the industry average of 10.58%.
- The 3 year average ROIC (21.68%) for CTAS is below the current ROIC(24.58%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.67% | ||
| ROE | 42.46% | ||
| ROIC | 24.58% |
ROA(3y)17.06%
ROA(5y)15.93%
ROE(3y)36.52%
ROE(5y)35.33%
ROIC(3y)21.68%
ROIC(5y)20.31%
1.3 Margins
- CTAS has a better Profit Margin (17.52%) than 97.50% of its industry peers.
- In the last couple of years the Profit Margin of CTAS has grown nicely.
- CTAS has a Operating Margin of 22.98%. This is amongst the best in the industry. CTAS outperforms 97.50% of its industry peers.
- CTAS's Operating Margin has improved in the last couple of years.
- CTAS's Gross Margin of 50.25% is amongst the best of the industry. CTAS outperforms 90.00% of its industry peers.
- In the last couple of years the Gross Margin of CTAS has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.98% | ||
| PM (TTM) | 17.52% | ||
| GM | 50.25% |
OM growth 3Y3.91%
OM growth 5Y6.07%
PM growth 3Y3.71%
PM growth 5Y7.35%
GM growth 3Y2.66%
GM growth 5Y1.86%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), CTAS is creating value.
- CTAS has less shares outstanding than it did 1 year ago.
- CTAS has less shares outstanding than it did 5 years ago.
- CTAS has a better debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 11.80 indicates that CTAS is not in any danger for bankruptcy at the moment.
- CTAS has a better Altman-Z score (11.80) than 92.50% of its industry peers.
- CTAS has a debt to FCF ratio of 1.67. This is a very positive value and a sign of high solvency as it would only need 1.67 years to pay back of all of its debts.
- With an excellent Debt to FCF ratio value of 1.67, CTAS belongs to the best of the industry, outperforming 85.00% of the companies in the same industry.
- A Debt/Equity ratio of 0.54 indicates that CTAS is somewhat dependend on debt financing.
- CTAS has a Debt to Equity ratio (0.54) which is comparable to the rest of the industry.
- Although CTAS does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.54 | ||
| Debt/FCF | 1.67 | ||
| Altman-Z | 11.8 |
ROIC/WACC2.82
WACC8.71%
2.3 Liquidity
- A Current Ratio of 1.71 indicates that CTAS should not have too much problems paying its short term obligations.
- CTAS has a better Current ratio (1.71) than 63.75% of its industry peers.
- A Quick Ratio of 1.49 indicates that CTAS should not have too much problems paying its short term obligations.
- CTAS has a Quick ratio (1.49) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.71 | ||
| Quick Ratio | 1.49 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 11.63% over the past year.
- Measured over the past years, CTAS shows a quite strong growth in Earnings Per Share. The EPS has been growing by 16.84% on average per year.
- CTAS shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.60%.
- Measured over the past years, CTAS shows a small growth in Revenue. The Revenue has been growing by 7.85% on average per year.
EPS 1Y (TTM)11.63%
EPS 3Y15.77%
EPS 5Y16.84%
EPS Q2Q%11.01%
Revenue 1Y (TTM)8.6%
Revenue growth 3Y9.6%
Revenue growth 5Y7.85%
Sales Q2Q%9.3%
3.2 Future
- CTAS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.23% yearly.
- Based on estimates for the next years, CTAS will show a quite strong growth in Revenue. The Revenue will grow by 8.20% on average per year.
EPS Next Y12.8%
EPS Next 2Y11.82%
EPS Next 3Y11.34%
EPS Next 5Y11.23%
Revenue Next Year8.74%
Revenue Next 2Y8.07%
Revenue Next 3Y7.75%
Revenue Next 5Y8.2%
3.3 Evolution
- The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
- 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
- A Price/Earnings ratio of 41.11 indicates a quite expensive valuation of CTAS.
- The rest of the industry has a similar Price/Earnings ratio as CTAS.
- The average S&P500 Price/Earnings ratio is at 28.60. CTAS is valued slightly more expensive when compared to this.
- CTAS is valuated quite expensively with a Price/Forward Earnings ratio of 34.52.
- CTAS's Price/Forward Earnings is on the same level as the industry average.
- The average S&P500 Price/Forward Earnings ratio is at 25.83. CTAS is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.11 | ||
| Fwd PE | 34.52 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, CTAS is valued a bit more expensive than the industry average as 61.25% of the companies are valued more cheaply.
- The rest of the industry has a similar Price/Free Cash Flow ratio as CTAS.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 42.96 | ||
| EV/EBITDA | 26.41 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- CTAS has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)3.21
PEG (5Y)2.44
EPS Next 2Y11.82%
EPS Next 3Y11.34%
5. Dividend
5.1 Amount
- CTAS has a yearly dividend return of 0.93%, which is pretty low.
- Compared to an average industry Dividend Yield of 0.82, CTAS pays a bit more dividend than its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.82, CTAS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.93% |
5.2 History
- On average, the dividend of CTAS grows each year by 18.49%, which is quite nice.
- CTAS has paid a dividend for at least 10 years, which is a reliable track record.
- CTAS has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)18.49%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
- 34.69% of the earnings are spent on dividend by CTAS. This is a low number and sustainable payout ratio.
- CTAS's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP34.69%
EPS Next 2Y11.82%
EPS Next 3Y11.34%
CINTAS CORP / CTAS FAQ
Can you provide the ChartMill fundamental rating for CINTAS CORP?
ChartMill assigns a fundamental rating of 7 / 10 to CTAS.
What is the valuation status for CTAS stock?
ChartMill assigns a valuation rating of 2 / 10 to CINTAS CORP (CTAS). This can be considered as Overvalued.
Can you provide the profitability details for CINTAS CORP?
CINTAS CORP (CTAS) has a profitability rating of 10 / 10.
What is the financial health of CINTAS CORP (CTAS) stock?
The financial health rating of CINTAS CORP (CTAS) is 8 / 10.
Can you provide the dividend sustainability for CTAS stock?
The dividend rating of CINTAS CORP (CTAS) is 5 / 10 and the dividend payout ratio is 34.69%.