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 scores excellent points on both the profitability and health parts. This is a solid base for a good stock. CTAS is valied quite expensively at the moment, while it does show a decent growth rate. This makes CTAS very considerable 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.
Each year in the past 5 years CTAS has been profitable.
Each year in the past 5 years CTAS had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 18.44%, CTAS belongs to the best of the industry, outperforming 96.39% of the companies in the same industry.
With an excellent Return On Equity value of 38.59%, CTAS belongs to the best of the industry, outperforming 96.39% of the companies in the same industry.
CTAS has a better Return On Invested Capital (23.98%) 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 11.35%.
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
CTAS has a Profit Margin of 17.47%. This is amongst the best in the industry. CTAS outperforms 91.57% of its industry peers.
In the last couple of years the Profit Margin of CTAS has grown nicely.
CTAS's Operating Margin of 22.77% is amongst the best of the industry. CTAS outperforms 96.39% of its industry peers.
CTAS's Operating Margin has improved in the last couple of years.
CTAS's Gross Margin of 49.92% is amongst the best of the industry. CTAS outperforms 86.75% of its industry peers.
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
CTAS has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for CTAS has been increased compared to 1 year ago.
The number of shares outstanding for CTAS has been increased compared to 5 years ago.
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.
With an excellent Altman-Z score value of 14.43, CTAS belongs to the best of the industry, outperforming 97.59% of the companies in the same industry.
The Debt to FCF ratio of CTAS is 1.36, which is an excellent value as it means it would take CTAS, only 1.36 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 1.36, CTAS belongs to the best of the industry, outperforming 83.13% of the companies in the same industry.
A Debt/Equity ratio of 0.44 indicates that CTAS is not too dependend on debt financing.
CTAS has a Debt to Equity ratio of 0.44. This is comparable to the rest of the industry: CTAS outperforms 56.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.44 | ||
| Debt/FCF | 1.36 | ||
| Altman-Z | 14.43 |
ROIC/WACC2.67
WACC8.99%
2.3 Liquidity
A Current Ratio of 1.72 indicates that CTAS should not have too much problems paying its short term obligations.
The Current ratio of CTAS (1.72) is better than 61.45% of its industry peers.
A Quick Ratio of 1.50 indicates that CTAS should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.50, CTAS is in line with its industry, outperforming 59.04% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.72 | ||
| Quick Ratio | 1.5 |
3. Growth
3.1 Past
CTAS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 19.27%, which is quite good.
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.
CTAS shows a small growth in Revenue. In the last year, the Revenue has grown by 7.79%.
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
The Earnings Per Share is expected to grow by 11.83% on average over the next years. This is quite good.
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 Year7.38%
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
The Price/Earnings ratio is 51.46, 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.
Compared to an average S&P500 Price/Earnings ratio of 25.91, CTAS is valued quite expensively.
Based on the Price/Forward Earnings ratio of 44.99, the valuation of CTAS can be described as expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as CTAS.
CTAS's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 21.77.
| 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.
CTAS has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as CTAS's earnings are expected to grow with 12.71% in the coming years.
PEG (NY)2.81
PEG (5Y)3.48
EPS Next 2Y14.25%
EPS Next 3Y12.71%
5. Dividend
5.1 Amount
CTAS has a yearly dividend return of 0.71%, which is pretty low.
Compared to an average industry Dividend Yield of 2.56, CTAS pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.71, CTAS pays less dividend than the S&P500 average, which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.71% |
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%
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%