CINTAS CORP (CTAS) Stock Fundamental Analysis
NASDAQ:CTAS - Nasdaq - US1729081059 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to CTAS. 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. 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.
In the past year CTAS had a positive cash flow from operations.
In the past 5 years CTAS has always been profitable.
CTAS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 18.40%, CTAS belongs to the top of the industry, outperforming 96.43% of the companies in the same industry.
The Return On Equity of CTAS (38.58%) is better than 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 11.60%.
The last Return On Invested Capital (23.03%) for CTAS is above the 3 year average (21.73%), which is a sign of increasing profitability.
| 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
With an excellent Profit Margin value of 17.48%, CTAS belongs to the best of the industry, outperforming 91.67% of the companies in the same industry.
In the last couple of years the Profit Margin of CTAS has grown nicely.
CTAS has a better Operating Margin (22.82%) than 96.43% of its industry peers.
In the last couple of years the Operating Margin of CTAS has grown nicely.
With an excellent Gross Margin value of 50.04%, CTAS belongs to the best of the industry, outperforming 88.10% of the companies in the same industry.
CTAS's Gross Margin has improved in the last couple of years.
| 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so CTAS is creating value.
The number of shares outstanding for CTAS has been reduced compared to 1 year ago.
Compared to 5 years ago, CTAS has less shares outstanding
CTAS has a better debt/assets ratio than last year.
2.2 Solvency
CTAS has an Altman-Z score of 14.16. This indicates that CTAS is financially healthy and has little risk of bankruptcy at the moment.
CTAS's Altman-Z score of 14.16 is amongst the best of the industry. CTAS outperforms 96.43% of its industry peers.
CTAS has a debt to FCF ratio of 1.38. This is a very positive value and a sign of high solvency as it would only need 1.38 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 1.38, CTAS belongs to the best of the industry, outperforming 82.14% of the companies in the same industry.
CTAS has a Debt/Equity ratio of 0.52. This is a neutral value indicating CTAS is somewhat dependend on debt financing.
CTAS has a Debt to Equity ratio (0.52) which is comparable to the rest of the industry.
Even though the debt/equity ratio score it not favorable for CTAS, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | 1.38 | ||
| Altman-Z | 14.16 |
ROIC/WACC2.63
WACC8.74%
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.
With a decent Current ratio value of 2.09, CTAS is doing good in the industry, outperforming 71.43% of the companies in the same industry.
A Quick Ratio of 1.82 indicates that CTAS should not have too much problems paying its short term obligations.
CTAS has a better Quick ratio (1.82) than 73.81% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.09 | ||
| Quick Ratio | 1.82 |
3. Growth
3.1 Past
CTAS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 16.51%, which is quite good.
CTAS shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 16.84% yearly.
CTAS shows a small growth in Revenue. In the last year, the Revenue has grown by 7.75%.
The Revenue has been growing slightly by 7.85% on average over the past years.
EPS 1Y (TTM)16.51%
EPS 3Y15.77%
EPS 5Y16.84%
EPS Q2Q%9.27%
Revenue 1Y (TTM)7.75%
Revenue growth 3Y9.6%
Revenue growth 5Y7.85%
Sales Q2Q%7.96%
3.2 Future
The Earnings Per Share is expected to grow by 10.74% on average over the next years. This is quite good.
CTAS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.72% yearly.
EPS Next Y12.04%
EPS Next 2Y10.86%
EPS Next 3Y10.67%
EPS Next 5Y10.74%
Revenue Next Year7.89%
Revenue Next 2Y7.51%
Revenue Next 3Y7.44%
Revenue Next 5Y7.72%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of 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 51.04, which means the current valuation is very expensive for CTAS.
Compared to the rest of the industry, the Price/Earnings ratio of CTAS is on the same level as its industry peers.
CTAS is valuated expensively when we compare the Price/Earnings ratio to 27.24, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 45.56, CTAS can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CTAS is on the same level as its industry peers.
The average S&P500 Price/Forward Earnings ratio is at 36.42. CTAS is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 51.04 | ||
| Fwd PE | 45.56 |
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 60.71% of the companies in the same industry.
CTAS's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 51.63 | ||
| EV/EBITDA | 32.03 |
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.
PEG (NY)4.24
PEG (5Y)3.03
EPS Next 2Y10.86%
EPS Next 3Y10.67%
5. Dividend
5.1 Amount
CTAS has a yearly dividend return of 0.81%, which is pretty low.
CTAS's Dividend Yield is a higher than the industry average which is at 2.50.
With a Dividend Yield of 0.81, CTAS pays less dividend than the S&P500 average, which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.81% |
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
CTAS pays out 33.84% of its income as dividend. This is a sustainable payout ratio.
CTAS's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP33.84%
EPS Next 2Y10.86%
EPS Next 3Y10.67%
225.09
+3.59 (+1.62%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners67.28%
Inst Owner Change-0.83%
Ins Owners1.72%
Ins Owner Change-0.58%
Market Cap90.71B
Analysts70.37
Price Target221.59 (-1.55%)
Short Float %1.59%
Short Ratio3.79
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.81% |
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)1.64%
PT rev (3m)2.39%
EPS NQ rev (1m)-0.38%
EPS NQ rev (3m)-0.34%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.02%
Revenue NQ rev (1m)0.66%
Revenue NQ rev (3m)0.66%
Revenue NY rev (1m)0.65%
Revenue NY rev (3m)0.61%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 51.04 | ||
| Fwd PE | 45.56 | ||
| P/S | 8.77 | ||
| P/FCF | 51.63 | ||
| P/OCF | 41.88 | ||
| P/B | 19.36 | ||
| P/tB | 93.09 | ||
| EV/EBITDA | 32.03 |
EPS(TTM)4.41
EY1.96%
EPS(NY)4.94
Fwd EY2.2%
FCF(TTM)4.36
FCFY1.94%
OCF(TTM)5.37
OCFY2.39%
SpS25.66
BVpS11.62
TBVpS2.42
PEG (NY)4.24
PEG (5Y)3.03
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 | 14.16 |
F-Score8
WACC8.74%
ROIC/WACC2.63
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)16.51%
EPS 3Y15.77%
EPS 5Y16.84%
EPS Q2Q%9.27%
EPS Next Y12.04%
EPS Next 2Y10.86%
EPS Next 3Y10.67%
EPS Next 5Y10.74%
Revenue 1Y (TTM)7.75%
Revenue growth 3Y9.6%
Revenue growth 5Y7.85%
Sales Q2Q%7.96%
Revenue Next Year7.89%
Revenue Next 2Y7.51%
Revenue Next 3Y7.44%
Revenue Next 5Y7.72%
EBIT growth 1Y14.07%
EBIT growth 3Y14.13%
EBIT growth 5Y14.55%
EBIT Next Year30.92%
EBIT Next 3Y15.73%
EBIT Next 5Y13.33%
FCF growth 1Y5.19%
FCF growth 3Y10.65%
FCF growth 5Y10.61%
OCF growth 1Y4.14%
OCF growth 3Y12.1%
OCF growth 5Y10.89%