April 16, 2025 a 10:46 am
CTAS: Dividend Analysis - Cintas Corporation
Cintas Corporation, a leading player in its industry, offers a compelling dividend profile. With a robust dividend history spanning 42 years, the corporation demonstrates resilience and commitment to its shareholders, despite recent modest dividend yield figures and growth rates. Though growth is currently negative, consistent payments indicate financial stability.
Overview 📊
Cintas Corporation operates within the Industrial Goods sector, delivering a healthy staple of financial services. Despite having a lower-than-average dividend yield of 1.03%, its strong history of 42 years without any cuts is commendable. The current dividend per share is 1.31 USD, reflecting the company's reliability in consistent ongoing payouts.
| Metric | Details |
|---|---|
| Sector | Industrial Goods |
| Dividend yield | 1.03 % |
| Current dividend per share | 1.31 USD |
| Dividend history | 42 years |
| Last cut or suspension | None |
Dividend History 🗣️
The dividend history, stretching back four decades, indicates Cintas Corporation's dedication towards shareholder returns. The significance of such historical data provides shareholders with the confidence in the company's stable financial structuring.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 0.4875 |
| 2024 | 2.3325 |
| 2023 | 2.1125 |
| 2022 | 1.7625 |
| 2021 | 2.8375 |
Dividend Growth 📈
Dividend growth is crucial as it indicates the company’s potential to increase shareholder returns over time. However, Cintas shows a slight decline in its 3-year (-6.32%) and 5-year (-1.77%) growth rates. This reduction suggests moderate changes in dividend policies which could be reflective of strategic financial adjustments.
| Time | Growth |
|---|---|
| 3 years | -6.32 % |
| 5 years | -1.77 % |
The average dividend growth is -1.77 % over 5 years. This shows moderate but steady dividend adjustments.
Payout Ratio 💰
Payout ratios illuminate a company’s dividend sustainability and financial health. Cintas’ EPS-based payout ratio is 29.65%, and FCF-based ratio is 28.86%. These figures suggest prudent management of earnings allocation to dividends, ensuring continued infrastructural and operational investments for long-term success.
| Key Figure | Ratio |
|---|---|
| EPS-based | 29.65 % |
| Free cash flow-based | 28.86 % |
The payout reflects a sound dividend policy ensuring future growth investments are not compromised, with both EPS and FCF ratios indicating a balanced approach.
Cashflow & Capital Efficiency 🚀
Cash flow and capital efficiency metrics provide insight into a company’s ability to generate cash and its efficiency in using its capital. With a Free Cash Flow Yield at 2.17% and Earnings Yield at 2.12%, we're witnessing marginal returns over the past year, reminding us of Cintas’ strategic focus on capital efficiency.
| Year | Free Cash Flow Yield | Earnings Yield | CAPEX to Operating Cash Flow | Stock-based Compensation to Revenue | FCF/Operating Cash Flow Ratio |
|---|---|---|---|---|---|
| 2024 | 2.42 % | 2.28 % | 19.69 % | 1.22 % | 80.31 % |
| 2023 | 2.64 % | 2.81 % | 20.72 % | 1.18 % | 79.28 % |
| 2022 | 3.16 % | 3.01 % | 15.65 % | 1.39 % | 84.35 % |
Despite fluctuating cash flow yields, the efficiency reflected in these metrics ensures Cintas remains a robust entity with regards to capital allocation strategies.
Balance Sheet & Leverage Analysis 🧾
Analyzing financial leverage and ratios provides a measure for debt burden and stability. With a steady capital structure, Cintas reflects prudent debt management strategies as shown by the Debt-to-Assets ratio of 29.10% and the Net Debt to EBITDA ratio of 0.16. These metrics augment the company's sound financial health and effective leverage handling.
| Year | Debt-to-Equity | Debt-to-Assets | Debt-to-Capital | Net Debt to EBITDA | Current Ratio | Quick Ratio | Financial Leverage |
|---|---|---|---|---|---|---|---|
| 2024 | 61.81 % | 29.10 % | 38.20 % | 0.92 | 1.74 | 1.52 | 2.12 |
| 2023 | 69.06 % | 31.22 % | 40.85 % | 1.15 | 2.39 | 1.15 | 2.21 |
| 2022 | 89.73 % | 36.43 % | 47.29 % | 1.45 | 1.84 | 0.87 | 2.46 |
These data paint a picture of dependable debt management and liquidity position, ensuring the company remains fiscally disciplined.
Fundamental Strength & Profitability 🏦
Fundamental ratios are vital indicators of profitability and operational efficiency. Cintas' Return on Equity at 41.30% asserts its efficacy in generating returns on shareholder equity, while the Return on Assets of 18.50% highlights its proficiency in asset utilization.
| Year | Return on Equity | Return on Assets | Net Margin | EBIT Margin | EBITDA Margin | Gross Margin | R&D to Revenue |
|---|---|---|---|---|---|---|---|
| 2024 | 36.41 % | 17.14 % | 16.38 % | 21.69 % | 26.30 % | 48.83 % | 0.00 % |
| 2023 | 34.89 % | 15.77 % | 15.29 % | 20.47 % | 25.20 % | 47.34 % | 0.28 % |
| 2022 | 37.35 % | 15.17 % | 15.73 % | 20.21 % | 25.34 % | 46.24 % | 0.30 % |
These ratios authenticate the profitability and operational robustness of Cintas, establishing it as a financially sound entity.
Price Development 📉
Dividend Scoring System ✅
| Category | Details | Score |
|---|---|---|
| Dividend yield | 1.03% | 2 |
| Dividend Stability | 42 years without cuts | 5 |
| Dividend growth | -1.77% over 5 years | 3 |
| Payout ratio | 29.65% EPS; 28.86% FCF | 4 |
| Financial stability | Strong leverage & position | 4 |
| Dividend continuity | Continuous dividends | 5 |
| Cashflow Coverage | 80.31% FCF/OCF Ratio | 4 |
| Balance Sheet Quality | Robust and healthy | 4 |
Total Score: 31/40
Rating ⚠️
In conclusion, Cintas Corporation maintains a fortified dividend strategy enveloped within a strong financial framework. Despite recent negative growth figures, the sustainability and stability of dividends are commendable, warranting a cautious yet optimistic outlook. Investors seeking reliable dividends with moderate growth potential may find Cintas a suitable pick.