CINTAS CORP (NASDAQ:CTAS) – A Quality Stock with Strong Fundamentals
By Mill Chart
Last update: May 26, 2025
CINTAS CORP (NASDAQ:CTAS) was identified as a strong candidate for quality investors through our Caviar Cruise stock screener. The company demonstrates consistent growth, high profitability, and solid financial health, making it a compelling option for long-term investors. Below, we examine why CTAS meets the criteria for quality investing.
Key Strengths of CINTAS CORP
- Revenue & EBIT Growth: Over the past five years, CTAS has delivered a revenue growth CAGR of 7.67% and an EBIT growth CAGR of 12.5%, indicating improving operational efficiency.
- High Return on Invested Capital (ROIC): With an ROIC (excluding cash and goodwill) of 51.32%, the company generates exceptional returns on capital deployed, well above the 15% threshold for quality stocks.
- Strong Profit Quality: CTAS converts net income into free cash flow efficiently, with a five-year average profit quality of 107.82%, reflecting reliable earnings.
- Low Debt Burden: The company’s debt-to-free cash flow ratio stands at 1.36, meaning it could repay all debt in just over a year using current cash flows.
Fundamental Analysis Summary
Our fundamental report assigns CTAS a score of 6 out of 10, with standout performance in profitability and financial health. Key highlights include:
- Profitability: High margins (Operating Margin of 22.77%, Profit Margin of 17.47%) and industry-leading ROIC.
- Financial Health: Strong solvency metrics, including a low Debt/Equity ratio (0.44) and an Altman-Z score of 14.43, signaling minimal bankruptcy risk.
- Valuation: Currently priced at a premium (P/E of 51.46), but justified by strong growth prospects and profitability.
For investors seeking stable, high-quality businesses, CTAS presents a well-rounded profile.
Our Caviar Cruise screener lists more quality stocks and is updated daily.
Disclaimer
This is not investing advice! The article highlights observations at the time of writing, but you should conduct your own analysis before making investment decisions.
