CINTAS CORP (CTAS) Stock Fundamental Analysis
USA - NASDAQ:CTAS - US1729081059 - Common Stock
187.96 USD
-3.79 (-1.98%)
189.95 USD
+1.99 (+1.06%)
Taking everything into account, CTAS scores 7 out of 10 in our fundamental rating. CTAS was compared to 84 industry peers in the Commercial Services & Supplies industry. Both the health and profitability get an excellent rating, making CTAS a very profitable company, without any liquidiy or solvency issues. CTAS is valied quite expensively at the moment, while it does show a decent growth rate. These ratings could make CTAS a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
In the past year CTAS was profitable.
In the past year CTAS had a positive cash flow from operations.
CTAS had positive earnings in each of the past 5 years.
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 18.40%, CTAS belongs to the top of the industry, outperforming 98.81% of the companies in the same industry.
CTAS's Return On Equity of 38.58% is amongst the best of the industry. CTAS outperforms 96.43% of its industry peers.
CTAS has a Return On Invested Capital of 23.03%. This is amongst the best in the industry. CTAS outperforms 96.43% of its industry peers.
CTAS had an Average Return On Invested Capital over the past 3 years of 21.73%. This is significantly above the industry average of 10.21%.
The 3 year average ROIC (21.73%) for CTAS is below the current ROIC(23.03%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.4% | ||
| ROE | 38.58% | ||
| ROIC | 23.03% |
ROA(3y)17.08%
ROA(5y)15.94%
ROE(3y)36.57%
ROE(5y)35.36%
ROIC(3y)21.73%
ROIC(5y)20.34%
1.3 Margins
Looking at the Profit Margin, with a value of 17.48%, CTAS belongs to the top of the industry, outperforming 95.24% of the companies in the same industry.
In the last couple of years the Profit Margin of CTAS has grown nicely.
The Operating Margin of CTAS (22.82%) is better than 97.62% of its industry peers.
CTAS's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 50.04%, CTAS belongs to the best of the industry, outperforming 89.29% of the companies in the same industry.
In the last couple of years the Gross Margin of CTAS has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.82% | ||
| PM (TTM) | 17.48% | ||
| GM | 50.04% |
OM growth 3Y4.13%
OM growth 5Y6.21%
PM growth 3Y3.84%
PM growth 5Y7.43%
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.
The number of shares outstanding for CTAS has been reduced compared to 5 years ago.
CTAS has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 12.76 indicates that CTAS is not in any danger for bankruptcy at the moment.
CTAS has a better Altman-Z score (12.76) than 94.05% of its industry peers.
The Debt to FCF ratio of CTAS is 1.38, which is an excellent value as it means it would take CTAS, only 1.38 years of fcf income to pay off all of its debts.
CTAS has a better Debt to FCF ratio (1.38) than 84.52% of its industry peers.
A Debt/Equity ratio of 0.52 indicates that CTAS is somewhat dependend on debt financing.
CTAS has a Debt to Equity ratio (0.52) which is in line with its industry peers.
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 | 0.52 | ||
| Debt/FCF | 1.38 | ||
| Altman-Z | 12.76 |
ROIC/WACC2.7
WACC8.54%
2.3 Liquidity
CTAS has a Current Ratio of 2.09. This indicates that CTAS is financially healthy and has no problem in meeting its short term obligations.
CTAS's Current ratio of 2.09 is fine compared to the rest of the industry. CTAS outperforms 72.62% of its industry peers.
CTAS has a Quick Ratio of 1.82. This is a normal value and indicates that CTAS is financially healthy and should not expect problems in meeting its short term obligations.
CTAS has a Quick ratio of 1.82. This is in the better half of the industry: CTAS outperforms 76.19% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.09 | ||
| Quick Ratio | 1.82 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 13.89% over the past year.
CTAS shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 16.84% yearly.
Looking at the last year, CTAS shows a small growth in Revenue. The Revenue has grown by 7.75% in the last year.
The Revenue has been growing slightly by 7.85% on average over the past years.
EPS 1Y (TTM)13.89%
EPS 3Y15.77%
EPS 5Y16.84%
EPS Q2Q%9.09%
Revenue 1Y (TTM)7.75%
Revenue growth 3Y9.6%
Revenue growth 5Y7.85%
Sales Q2Q%8.66%
3.2 Future
Based on estimates for the next years, CTAS will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.27% on average per year.
The Revenue is expected to grow by 7.57% on average over the next years.
EPS Next Y12.15%
EPS Next 2Y11.2%
EPS Next 3Y10.87%
EPS Next 5Y10.27%
Revenue Next Year8.28%
Revenue Next 2Y7.73%
Revenue Next 3Y7.55%
Revenue Next 5Y7.57%
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.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 41.68, which means the current valuation is very expensive for CTAS.
CTAS's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 27.02. CTAS is valued rather expensively when compared to this.
A Price/Forward Earnings ratio of 34.47 indicates a quite expensive valuation of CTAS.
CTAS's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 22.57. CTAS is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.68 | ||
| Fwd PE | 34.47 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CTAS is on the same level as its industry peers.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CTAS is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 43.11 | ||
| EV/EBITDA | 27.83 |
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)3.43
PEG (5Y)2.47
EPS Next 2Y11.2%
EPS Next 3Y10.87%
5. Dividend
5.1 Amount
With a yearly dividend of 0.89%, CTAS is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.34, CTAS pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.44, CTAS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.89% |
5.2 History
The dividend of CTAS is nicely growing with an annual growth rate of 18.49%!
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
33.84% of the earnings are spent on dividend by CTAS. This is a low number and sustainable payout ratio.
The dividend of CTAS is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP33.84%
EPS Next 2Y11.2%
EPS Next 3Y10.87%
187.96
-3.79 (-1.98%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners67.36%
Inst Owner Change0%
Ins Owners1.64%
Ins Owner Change0.02%
Market Cap75.74B
Analysts70.77
Price Target223.94 (19.14%)
Short Float %2.33%
Short Ratio4.36
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.89% |
Yearly Dividend1.51
Dividend Growth(5Y)18.49%
DP33.84%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.41%
Min EPS beat(2)-0.11%
Max EPS beat(2)4.93%
EPS beat(4)3
Avg EPS beat(4)5.82%
Min EPS beat(4)-0.11%
Max EPS beat(4)13.14%
EPS beat(8)6
Avg EPS beat(8)3.96%
EPS beat(12)10
Avg EPS beat(12)3.53%
EPS beat(16)14
Avg EPS beat(16)4.18%
Revenue beat(2)0
Avg Revenue beat(2)-0.95%
Min Revenue beat(2)-1.5%
Max Revenue beat(2)-0.39%
Revenue beat(4)0
Avg Revenue beat(4)-1.41%
Min Revenue beat(4)-2.04%
Max Revenue beat(4)-0.39%
Revenue beat(8)0
Avg Revenue beat(8)-1.33%
Revenue beat(12)2
Avg Revenue beat(12)-0.78%
Revenue beat(16)4
Avg Revenue beat(16)-0.55%
PT rev (1m)-1.31%
PT rev (3m)2.72%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.17%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)0.1%
Revenue NQ rev (1m)-0.04%
Revenue NQ rev (3m)0.62%
Revenue NY rev (1m)0.36%
Revenue NY rev (3m)1.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.68 | ||
| Fwd PE | 34.47 | ||
| P/S | 7.32 | ||
| P/FCF | 43.11 | ||
| P/OCF | 34.97 | ||
| P/B | 16.17 | ||
| P/tB | 77.73 | ||
| EV/EBITDA | 27.83 |
EPS(TTM)4.51
EY2.4%
EPS(NY)5.45
Fwd EY2.9%
FCF(TTM)4.36
FCFY2.32%
OCF(TTM)5.38
OCFY2.86%
SpS25.66
BVpS11.63
TBVpS2.42
PEG (NY)3.43
PEG (5Y)2.47
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.4% | ||
| ROE | 38.58% | ||
| ROCE | 28.84% | ||
| ROIC | 23.03% | ||
| ROICexc | 23.8% | ||
| ROICexgc | 44.78% | ||
| OM | 22.82% | ||
| PM (TTM) | 17.48% | ||
| GM | 50.04% | ||
| FCFM | 16.99% |
ROA(3y)17.08%
ROA(5y)15.94%
ROE(3y)36.57%
ROE(5y)35.36%
ROIC(3y)21.73%
ROIC(5y)20.34%
ROICexc(3y)22.47%
ROICexc(5y)21.13%
ROICexgc(3y)44.71%
ROICexgc(5y)44.3%
ROCE(3y)27.22%
ROCE(5y)25.47%
ROICexcg growth 3Y2.84%
ROICexcg growth 5Y9.02%
ROICexc growth 3Y7.54%
ROICexc growth 5Y10.59%
OM growth 3Y4.13%
OM growth 5Y6.21%
PM growth 3Y3.84%
PM growth 5Y7.43%
GM growth 3Y2.66%
GM growth 5Y1.86%
F-Score8
Asset Turnover1.05
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | 1.38 | ||
| Debt/EBITDA | 0.85 | ||
| Cap/Depr | 82.74% | ||
| Cap/Sales | 3.95% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 75.89% | ||
| Profit Quality | 97.21% | ||
| Current Ratio | 2.09 | ||
| Quick Ratio | 1.82 | ||
| Altman-Z | 12.76 |
F-Score8
WACC8.54%
ROIC/WACC2.7
Cap/Depr(3y)85.41%
Cap/Depr(5y)70.68%
Cap/Sales(3y)3.99%
Cap/Sales(5y)3.41%
Profit Quality(3y)99.33%
Profit Quality(5y)102.76%
High Growth Momentum
Growth
EPS 1Y (TTM)13.89%
EPS 3Y15.77%
EPS 5Y16.84%
EPS Q2Q%9.09%
EPS Next Y12.15%
EPS Next 2Y11.2%
EPS Next 3Y10.87%
EPS Next 5Y10.27%
Revenue 1Y (TTM)7.75%
Revenue growth 3Y9.6%
Revenue growth 5Y7.85%
Sales Q2Q%8.66%
Revenue Next Year8.28%
Revenue Next 2Y7.73%
Revenue Next 3Y7.55%
Revenue Next 5Y7.57%
EBIT growth 1Y14.07%
EBIT growth 3Y14.13%
EBIT growth 5Y14.55%
EBIT Next Year30.87%
EBIT Next 3Y15.39%
EBIT Next 5Y12.98%
FCF growth 1Y5.19%
FCF growth 3Y10.65%
FCF growth 5Y10.61%
OCF growth 1Y4.14%
OCF growth 3Y12.1%
OCF growth 5Y10.89%