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 83 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. CTAS is valied quite expensively at the moment, while it does show a decent growth rate. These ratings would make CTAS suitable 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 18.44%, CTAS belongs to the top of the industry, outperforming 96.39% of the companies in the same industry.
The Return On Equity of CTAS (38.59%) is better than 96.39% of its industry peers.
The Return On Invested Capital of CTAS (23.98%) is better than 97.59% of its industry peers.
CTAS had an Average Return On Invested Capital over the past 3 years of 20.29%. This is significantly above the industry average of 10.89%.
The 3 year average ROIC (20.29%) for CTAS is below the current ROIC(23.98%), indicating increased profibility in the last year.
| 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
With an excellent Profit Margin value of 17.47%, CTAS belongs to the best of the industry, outperforming 91.57% of the companies in the same industry.
CTAS's Profit Margin has improved in the last couple of years.
CTAS has a Operating Margin of 22.77%. This is amongst the best in the industry. CTAS outperforms 96.39% of its industry peers.
CTAS's Operating Margin has improved in the last couple of years.
CTAS has a Gross Margin of 49.92%. This is amongst the best in the industry. CTAS outperforms 86.75% of its industry peers.
In the last couple of years the Gross Margin of CTAS has remained more or less at the same level.
| 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
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 increased compared to 1 year ago.
Compared to 5 years ago, CTAS has more shares outstanding
The debt/assets ratio for CTAS has been reduced compared to a year ago.
2.2 Solvency
CTAS has an Altman-Z score of 14.43. This indicates that CTAS is financially healthy and has little risk of bankruptcy at the moment.
CTAS has a better Altman-Z score (14.43) than 97.59% of its industry peers.
CTAS has a debt to FCF ratio of 1.36. This is a very positive value and a sign of high solvency as it would only need 1.36 years to pay back of all of its debts.
CTAS has a better Debt to FCF ratio (1.36) than 83.13% of its industry peers.
CTAS has a Debt/Equity ratio of 0.44. This is a healthy value indicating a solid balance between debt and equity.
CTAS has a Debt to Equity ratio (0.44) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.44 | ||
| Debt/FCF | 1.36 | ||
| Altman-Z | 14.43 |
ROIC/WACC2.67
WACC8.99%
2.3 Liquidity
CTAS has a Current Ratio of 1.72. 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 Current ratio, with a value of 1.72, CTAS is in the better half of the industry, outperforming 61.45% 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.
CTAS has a Quick ratio (1.50) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.72 | ||
| Quick Ratio | 1.5 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 19.27% 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 14.78% on average per year.
The Revenue has been growing slightly by 7.79% in the past year.
Measured over the past years, CTAS shows a small growth in Revenue. The Revenue has been growing by 6.84% on average per year.
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
Based on estimates for the next years, CTAS will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.83% on average per year.
CTAS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.67% yearly.
EPS Next Y18.29%
EPS Next 2Y14.25%
EPS Next 3Y12.71%
EPS Next 5Y11.83%
Revenue Next Year7.38%
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
The Price/Earnings ratio is 51.46, which means the current valuation is very expensive for CTAS.
CTAS's Price/Earnings is on the same level as the industry average.
CTAS's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 25.82.
The Price/Forward Earnings ratio is 44.99, which means the current valuation is very expensive for CTAS.
CTAS's Price/Forward Earnings is on the same level as the industry average.
CTAS's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 21.76.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 51.46 | ||
| Fwd PE | 44.99 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CTAS indicates a slightly more expensive valuation: CTAS is more expensive than 65.06% of the companies listed 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 | 49.13 | ||
| EV/EBITDA | 32.89 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of CTAS may justify a higher PE ratio.
CTAS's earnings are expected to grow with 12.71% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.81
PEG (5Y)3.48
EPS Next 2Y14.25%
EPS Next 3Y12.71%
5. Dividend
5.1 Amount
With a yearly dividend of 0.71%, CTAS is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.55, CTAS pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.39, CTAS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.71% |
5.2 History
The dividend of CTAS decreases each year by -0.11%.
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)-0.11%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
33.37% of the earnings are spent on dividend by CTAS. This is a low number and sustainable payout ratio.
DP33.37%
EPS Next 2Y14.25%
EPS Next 3Y12.71%
222.29
+0.63 (+0.28%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners67.15%
Inst Owner Change4.58%
Ins Owners1.79%
Ins Owner Change-0.02%
Market Cap89.76B
Analysts71.11
Price Target216.41 (-2.65%)
Short Float %1.42%
Short Ratio2.43
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.71% |
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)1.45%
PT rev (3m)5.22%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.85%
EPS NY rev (1m)0.07%
EPS NY rev (3m)1.53%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.41%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)0.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 51.46 | ||
| Fwd PE | 44.99 | ||
| P/S | 8.85 | ||
| P/FCF | 49.13 | ||
| P/OCF | 40.37 | ||
| P/B | 19.55 | ||
| P/tB | 119.79 | ||
| EV/EBITDA | 32.89 |
EPS(TTM)4.32
EY1.94%
EPS(NY)4.94
Fwd EY2.22%
FCF(TTM)4.52
FCFY2.04%
OCF(TTM)5.51
OCFY2.48%
SpS25.12
BVpS11.37
TBVpS1.86
PEG (NY)2.81
PEG (5Y)3.48
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 | 14.43 |
F-Score8
WACC8.99%
ROIC/WACC2.67
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 Year7.38%
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%