CINTAS CORP (CTAS) Stock Fundamental Analysis
NASDAQ:CTAS - Nasdaq - US1729081059 - Common Stock - Currency: USD
CTAS gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 83 industry peers in the Commercial Services & Supplies industry. CTAS gets an excellent profitability rating and is at the same time showing great financial health properties. While showing a medium growth rate, CTAS is valued expensive at the moment. These ratings could make CTAS a good candidate 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.
In the past 5 years CTAS always reported a positive cash flow from operatings.
1.2 Ratios
CTAS has a Return On Assets of 18.44%. This is amongst the best in the industry. CTAS outperforms 96.39% of its industry peers.
Looking at the Return On Equity, with a value of 38.59%, CTAS belongs to the top of the industry, outperforming 96.39% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 23.98%, CTAS belongs to the top of the industry, outperforming 96.39% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for CTAS is significantly above the industry average of 11.67%.
The last Return On Invested Capital (23.98%) for CTAS is above the 3 year average (20.29%), which is a sign of increasing profitability.
| 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
Looking at the Profit Margin, with a value of 17.47%, CTAS belongs to the top of the industry, outperforming 91.57% 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 (22.77%) is better than 96.39% of its industry peers.
In the last couple of years the Operating Margin of CTAS has grown nicely.
Looking at the Gross Margin, with a value of 49.92%, CTAS belongs to the top of the industry, outperforming 87.95% of the companies in the same industry.
CTAS's Gross Margin has been stable in the last couple of years.
| 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), CTAS is creating value.
The number of shares outstanding for CTAS has been increased compared to 1 year ago.
CTAS has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, CTAS has an improved debt to assets ratio.
2.2 Solvency
CTAS has an Altman-Z score of 14.10. This indicates that CTAS is financially healthy and has little risk of bankruptcy at the moment.
CTAS has a better Altman-Z score (14.10) than 95.18% 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 81.93% 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.
With a Debt to Equity ratio value of 0.44, CTAS perfoms like the industry average, outperforming 57.83% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.44 | ||
| Debt/FCF | 1.36 | ||
| Altman-Z | 14.1 |
ROIC/WACC2.69
WACC8.91%
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.
With a decent Current ratio value of 1.72, CTAS is doing good in the industry, outperforming 60.24% 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.
The Quick ratio of CTAS (1.50) 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.
Looking at the last year, CTAS shows a small growth in Revenue. The Revenue has grown by 7.79% in the last year.
CTAS shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.84% yearly.
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
CTAS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.83% yearly.
Based on estimates for the next years, CTAS will show a small growth in Revenue. The Revenue will grow by 7.67% on average per year.
EPS Next Y18.29%
EPS Next 2Y14.25%
EPS Next 3Y12.71%
EPS Next 5Y11.83%
Revenue Next Year7.37%
Revenue Next 2Y7.28%
Revenue Next 3Y7.15%
Revenue Next 5Y7.67%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last 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
A Price/Earnings ratio of 49.87 indicates a quite expensive valuation of CTAS.
CTAS's Price/Earnings ratio is in line with the industry average.
CTAS is valuated expensively when we compare the Price/Earnings ratio to 27.41, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 43.60, the valuation of CTAS can be described as expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as CTAS.
Compared to an average S&P500 Price/Forward Earnings ratio of 35.19, CTAS is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 49.87 | ||
| Fwd PE | 43.6 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CTAS is valued a bit more expensive than 63.86% 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 | 47.61 | ||
| EV/EBITDA | 31.9 |
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.
CTAS's earnings are expected to grow with 12.71% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.73
PEG (5Y)3.37
EPS Next 2Y14.25%
EPS Next 3Y12.71%
5. Dividend
5.1 Amount
With a yearly dividend of 0.72%, CTAS is not a good candidate for dividend investing.
CTAS's Dividend Yield is a higher than the industry average which is at 2.45.
Compared to an average S&P500 Dividend Yield of 2.35, CTAS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.72% |
5.2 History
The dividend of CTAS decreases each year by -0.11%.
CTAS has been paying a dividend for at least 10 years, so it has 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%
215.44
-1.12 (-0.52%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners67.28%
Inst Owner Change0%
Ins Owners1.72%
Ins Owner Change-0.02%
Market Cap86.99B
Analysts70.37
Price Target218.01 (1.19%)
Short Float %1.18%
Short Ratio2.8
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.72% |
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)0.74%
PT rev (3m)2.19%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.12%
EPS NY rev (1m)0%
EPS NY rev (3m)1.48%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)0%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 49.87 | ||
| Fwd PE | 43.6 | ||
| P/S | 8.58 | ||
| P/FCF | 47.61 | ||
| P/OCF | 39.13 | ||
| P/B | 18.94 | ||
| P/tB | 116.1 | ||
| EV/EBITDA | 31.9 |
EPS(TTM)4.32
EY2.01%
EPS(NY)4.94
Fwd EY2.29%
FCF(TTM)4.52
FCFY2.1%
OCF(TTM)5.51
OCFY2.56%
SpS25.12
BVpS11.37
TBVpS1.86
PEG (NY)2.73
PEG (5Y)3.37
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 | 14.1 |
F-Score8
WACC8.91%
ROIC/WACC2.69
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 Year7.37%
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%