June 05, 2025 a 07:31 am
CTAS: Dividend Analysis - Cintas Corporation
Cintas Corporation, being a leader in its industry, showcases a strong dividend history, reinforcing its reliability among dividend-focused investors. With a remarkable track record of 42 consecutive years of dividend payments, Cintas offers an interesting albeit low dividend yield relative to its market peers. The payout ratios reflect a disciplined financial approach, indicating room for future dividend enhancements while maintaining financial stability.
📊 Overview
Cintas Corporation operates in a competitive sector where maintaining consistent dividend growth is a testament to its financial health. Its current dividend yield of 0.98% falls below the market average, driven by its impressive market capitalization. Having never cut or suspended dividends for over four decades, it highlights the company's commitment to providing value to its shareholders.
| Metric | Value |
|---|---|
| Sector | Services |
| Dividend yield | 0.98% |
| Current dividend per share | 1.31 USD |
| Dividend history | 42 years |
| Last cut or suspension | None |
🗣️ Dividend History
The history of Cintas' dividend payments reflects its consistent profitability and willingness to return cash to shareholders. This long-standing tradition of dividend distributions is a crucial barometer of the company’s long-term fiscal stability and investor appeal. Analyzing the pattern and consistency of these payments can guide potential investors on future expectations.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 0.4875 |
| 2024 | 2.3325 |
| 2023 | 2.1125 |
| 2022 | 1.7625 |
| 2021 | 2.8375 |
📈 Dividend Growth
Despite a downturn in growth rates over 3-year and 5-year spans, Cintas exhibits a capacity for resilient performance. The fluctuations in these growth metrics are pivotal in determining long-term return capabilities for dividend investors, underlining the effect of economic cycles on corporate payout policies.
| Time | Growth |
|---|---|
| 3 years | -6.32% |
| 5 years | -1.77% |
The average dividend growth is -1.77% over 5 years. This shows moderate albeit challenging operating conditions with potential for future rebounds.
📉 Payout Ratio
Payout ratios primarily provide insights into a company’s dividend sustainability and potential for future growth. Cintas exhibits an EPS-based payout ratio of 29.65% and a free cash flow-based payout ratio of 28.86%, providing substantial room for both growth and reinvestment. These are consistent with a financially disciplined company.
| Key figure ratio | Value |
|---|---|
| EPS-based | 29.65% |
| Free cash flow-based | 28.86% |
The conservative payout ratios suggest a strong capacity to weather economic downturns while exploring growth avenues.
💵 Cashflow & Capital Efficiency
Efficient cash flow and capital utilization are fundamental to dividend payments and enterprise growth. Evaluating free cash flow yields alongside capital expenditure ratios helps in measuring these efficiencies.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 2.42% | 2.64% | 3.16% |
| Earnings Yield | 2.28% | 2.81% | 3.01% |
| CAPEX/Ops Cash Flow | 19.69% | 20.72% | 15.65% |
| Stock Compensation/Revenue | 1.22% | 1.18% | 1.39% |
| FCF/Ops Cash Flow Ratio | 80.31% | 79.28% | 84.35% |
The cash flow indicators highlight a solid ability to generate operating cash and navigate financial commitments efficiently.
📊 Balance Sheet & Leverage Analysis
Assessing leverage metrics such as debt-to-equity ratios provides insights into financial risk and organizational leverage levels, crucial for dividend predictability.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.62 | 0.69 | 0.90 |
| Debt-to-Assets | 0.29 | 0.31 | 0.36 |
| Debt-to-Capital | 0.38 | 0.41 | 0.47 |
| Net Debt to EBITDA | 0.92 | 1.15 | 1.45 |
| Current Ratio | 1.74 | 2.39 | 1.84 |
| Quick Ratio | 1.52 | 1.15 | 0.87 |
| Financial Leverage | 2.12 | 2.21 | 2.46 |
The balance sheet indicates solid financial stability with diminishing leverage ratios effectively managed over the recent fiscal periods.
🔍 Fundamental Strength & Profitability
Cintas’ profitability ratios like return on equity and asset utilization reflect its fundamental strength, with well-managed margins underpinning its profitability.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 36.41% | 34.89% | 37.35% |
| Return on Assets | 17.14% | 15.77% | 15.17% |
| Net Margin | 16.38% | 15.29% | 15.73% |
| EBIT Margin | 21.69% | 20.47% | 20.21% |
| EBITDA Margin | 26.30% | 25.20% | 25.34% |
| Gross Margin | 48.83% | 47.34% | 46.24% |
| R&D to Revenue | - | 0.28% | 0.30% |
Cintas Corporation demonstrates robust profit-generation capabilities, maintaining a competitive edge through strategic margin management.
📈 Price Development
✅ Dividend Scoring System
| Category | Score | Score Bar |
|---|---|---|
| Dividend yield | 1 | |
| Dividend Stability | 5 | |
| Dividend growth | 2 | |
| Payout ratio | 3 | |
| Financial stability | 4 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Overall Score: 28/40
🔍 Rating
With a comprehensive dividend scoring of 28 out of 40, Cintas Corporation presents itself as a fundamentally strong company with particular strengths in dividend stability and financial robustness. However, it displays moderate levels of dividend yield and growth. Overall, it is recommended for investors seeking stable income streams underpinned by financial discipline and strategic management.