July 04, 2025 a 07:46 am
CTAS: Dividend Analysis - Cintas Corporation
Cintas Corporation presents a remarkable dividend profile fortified by a decades-long history of consistent payouts. The company's robust financials bolster its ability to maintain a reliable dividend stream, appealing to investors seeking long-term income stability. Despite a slightly challenging recent growth trajectory, its disciplined financial management and strategic market positioning augur well for future dividend resilience.
Overview
As a company in the industrial sector, Cintas Corporation is noted for its stable yet modest dividend yield, reflecting a mature and sustained dividend policy. Strategic foresight and financial management have facilitated a 42-year history of dividends without cuts, underscoring a profound commitment to shareholder returns.
| Criterion | Details |
|---|---|
| Sector | Industrial |
| Dividend yield | 0.98 % |
| Current dividend per share | 1.31 USD |
| Dividend history | 42 years |
| Last cut or suspension | None |
Dividend History
The longstanding dividend history, stretching over four decades, evidences Cintas's dedication to investor returns. The absence of recent cuts or suspensions enhances its credibility, projecting a dependable income source against market volatility.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 0.49 |
| 2024 | 2.33 |
| 2023 | 2.11 |
| 2022 | 1.76 |
| 2021 | 2.84 |
Dividend Growth
Despite facing headwinds leading to a negative growth trend, the 5-year horizon encapsulates Cintas's perseverance in prioritizing dividend allocations. It poses an optimistic outlook towards eventual growth stabilization.
| 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 growth.
Payout Ratio
Balancing shareholder expectations with reinvestment needs, Cintas's payout ratio remains commendably below industry thresholds, advocating sustainable payout coverage.
| Key Figure | Ratio |
|---|---|
| EPS-based | 29.91 % |
| Free cash flow-based | 28.86 % |
The low payout ratio indicates a strong buffer for covering dividends, particularly with an EPS-based payout of 29.91 % and FCF-based of 28.86 %, signaling dividend sustainability.
Cashflow & Capital Efficiency
Robust cash flow metrics underpin the company's capacity for innovative investments while maintaining dividend payouts. Sustained capital efficiency optimizes return on invested capital.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 2.42 % | 2.64 % | 3.16 % |
| Earnings Yield | 2.28 % | 2.81 % | 3.01 % |
| CAPEX to Operating Cash Flow | 19.69 % | 20.72 % | 15.65 % |
| Stock-based Compensation to Revenue | 1.22 % | 1.18 % | 1.39 % |
| Free Cash Flow / Operating Cash Flow Ratio | 80.31 % | 79.28 % | 84.35 % |
Cashflow metrics reflect stability and prudent capital deployment, enhancing Cintas's dividend viability and growth potential.
Balance Sheet & Leverage Analysis
With conservative leverage and assessed financial metric ratios, Cintas demonstrates marked financial endurance while preparing for potential economic headwinds.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 61.81 % | 69.06 % | 89.73 % |
| Debt-to-Assets | 29.10 % | 31.22 % | 36.43 % |
| Debt-to-Capital | 38.20 % | 40.85 % | 47.29 % |
| 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 |
Cintas exhibits normative leverage levels beneficial for its debt strategy, maintaining strong liquidity positions and conservative capital handling.
Fundamental Strength & Profitability
Cintas boasts a satisfactorily performing profitability matrix alongside steadily strengthening fundamentals, underpinning continued value creation.
| Year | 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 % |
| Research & Development to Revenue | 0.26 % | 0.28 % | 0.30 % |
Cintas maintains a steady trajectory of profitability, driven by efficient operational management and strategic fiscal stewardship.
Dividend Scoring System
| Criterion | Score | Score Bar |
|---|---|---|
| Dividend yield | 3 | |
| Dividend Stability | 5 | |
| Dividend Growth | 2 | |
| Payout Ratio | 4 | |
| Financial Stability | 4 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Overall Score: 31/40
Rating
Cintas Corporation stands as a beacon of dividend reliability within the industrial sector, framed by its longstanding payment track record and strategic financial discipline. While contemporary growth challenges temper aggressive dividend expansions, its underlying fundamentals remain resilient. Investors should consider Cintas for its consistent returns and moderate potential for future dividend growth improvements.