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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Cintas Corporation (XNAS:CTAS) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
CTAS
Name:
CINTAS CORPORATION (XNAS:CTAS)
Sector:
213.39M
Industry:
Specialty Business Services
CEO:
Mr. Scott Farmer
Total Employees:
43,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -159.74% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF CINTAS CORPORATION(CTAS) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SPECIALTY BUSINESS SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
405.79
One Month Price Target:
$409.04
Six Month Price Target :
$425.27
Likely Price in One Year's Time:
Ticker:
$444.75
Likely Trading Range Today Under (Normal Volatility)
$404.56
Price Upper limit ($) :
$407.78
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$386.73
This week:
$363.17
This month :
$320.55
Other Primary facts
Market Cap:
41.86B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
101.19M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
14.66%
-16.86%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$494.16
$453.13
$317.42
$358.45
Medium risk (<10%) entry points
Buy Call
Sell Call
$439.78
Buy Put:
Sell Put:
$431.02
$371.69
$380.56
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
CTAS
Sharpe Ratio:
3.62%
Comparison:
CTAS, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 515.05% higher than the industry
& ratio is 58.93% higher than the market/S&P 500 average
Average Returns/Yield of
CTAS
Daily returns:
0.09%
Weekly returns:
0.47%
Monthly returns:
1.87%
Yearly returns:
5.18%
Comparison of returns:
Average annual returns/yield (last 3 years) is 332.26% above industry average
Classification:
CTAS, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.39
Statistical test of Returns:
CTAS has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.33%
Weekly Volatility:
5.22%
Monthly Volatility:
10.43%
Yearly Volatility:
36.13%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.70%
Volatility in last five trading days has been -69.99% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.70%
Weekly VaR:
-10.50%
Monthly VaR:
-21.00%
How Much Can the price of
CTAS
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-18%
Worst case (decline):
-72.76%
This translates to price declining to:
$334.77
This translates to price declining to:
$110.53
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
CTAS is a 48.25% riskier investment compared to the market/S&P 500 & is 27.01% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -11.33% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
CTAS
Beta in relation to market/S&P 500--1.43
Expected beta in 1 year's time:
0.885
Expected beta in 3 year's time:
1.252
Unlevered (debt free) Beta:
1.043
Beta in relation to Nasdaq (XNAS):
0.875
Beta in relation to all global stocks::
0.82
Beta Comparison & Analysis
Beta of competitors/peers::
1.086
Beta is 31.62% higher than peers
Average Industry Beta:
1.172
Beta is 21.90% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
21.67%
Sustainable growth rate is -38.50% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.095
Alpha is -257.82% below industry average alpha yield
Alpha is 602% higher than market/& is unsustainably high
Analysis of Cost of Capital of
CTAS
Equity cost of capital:
0.129
Equity cost of capital is 15.73% above industry mean WACC
Unlevered (without debt) cost of capital:
9.45%
Before-tax cost of debt:
3.24%
After-tax cost of debt:
2.56%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.56%
WACC is 17.99% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$75.26
Revenue growth rate per share of (3Y):
12.41
Annual revenue growth rate is 176.56% above the industry average
EPS:
$11.33
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$11.84
Balance sheet equity growth per share: 161.25%
Equity growth rate per share is -49.14% lower than the industry
Debt per share
$14.48
EBITDA per share
$19.12
Valuation Analysis Today of
CTAS
P/E Ratio:
34.84
P/E Ratio of Competitors/Peers:
28.41
P/E ratio is 22.63% higher than main peers & is 24.80% higher than the industry
Stock price/value with industry average P/E ratio: $316.30
CTAS is 28.29% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $26.68
Present value of the expected future dividends only: $19.44
P/S (Price to Sales ratio):
5.39
Price to sales ratio is 54.07% above the industry mean
P/B (Price to book value ratio):
12.41
Price to free cash flow: 34.29
-
Net income growth rate (3Y):
34.01%
Net income growth rate is -99.99% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 6.55%
Dividend yeild: 0.94%
Previous Dividend: $0.95
Previous adjusted dividend: $0.95
Previous Dividend: $3.80
Expected next dividend best case: $1.59
Expected next dividend worst case: $0.31
Average dividend payment (long-term): $1.07
Average dividend increase/decrease (growth rate) % per period: -5.53%
Expected next dividend payment date: 13/09/2022
Expected next dividend record date: 15/08/2022
Expected next dividend declaration date: 07/12/2022
Previous dividend payment date: 15/06/2022
Previous dividend record date: 16/05/2022
Previous dividend declaration date: 13/04/2022
Dividend History:
2022-05-13--$0.95
2021-11-12--$0.95
2021-05-13--$0.75
2022-02-14--$0.95
2021-08-12--$0.95
2021-02-11--$0.75
Dividend growth rate is -145.74% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
44.29%
Net debt to equity ratio:
81.72%
Debt to assets ratio:
18.65%
Net debt to assets ratio:
34.41%
Debt-to-asset ratio is -69.99% below industry average
Ability to repay debt:
Interest coverage ratio:
21.42
Interest coverage ratio is 478.39% more than industry average
Looking forward:
Debt growth rate:
0.41%
Annual debt growth is -82% lower than industry average debt growth rate
Debt repayment rate in last quarter: 14.57%
Analysis of Key Statistics
Correlation of price movement with the market:
0.786
Statistical significance of correlation:
CTAS has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.646
Stock price is 21.77% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.646
Correlation of price movement with Nasdaq (^IXIC):
0.019
Covariance of price movement with the market:
0.025
Kurtosis
10.881
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.452
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
CTAS
Gross Profit Margin Ratio:
186%
Operating Profit Margin Ratio:
20.21%
Operating profit margin is 80.52% higher than the industry
Net Profit Margin Ratio:
186%
Effective Tax Rate:
16.58%
Effective tax rate is -5.07% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
36.54%
Return on equity (ROE) is 10.05% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
15.39%
Return on assets (ROA) is 158.98% higher than the industry
Financial Leverage:
1.2x
Current Ratio:
1.09
Current ratio is -45.42% below industry average
Cash Conversion Cycle (days):
60.6
Cash conversion cycle is 132.31% above industry average
The remaining useful life of property plant & equipment is: 0.2 years
Stock based compensation to net income ratio:
3.02%
In-depth Efficiency Analysis
Revenue generated per employee:
177.1K
Each employee generates -36% less revenue than industry average revenue per employee
EBITDA generated per employee:
45.0K
Each employee generates -49% less EBITDA than industry average revenue per employee
Profit generated per employee:
28.1K
Each employee generates -44% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
5.0K
Each employee generates -65% less free cash flow than industry average revenue per employee
Assets/Capital per employee
125.1K
Each employee generates -65% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
CTAS
OLD DOMINION FREIGHT LINE, INC. (XNAS:ODFL)
PAYCHEX, INC. (XNAS:PAYX)
Fastenal Company (XNAS:FAST)
PACCAR INC (XNAS:PCAR)
COPART, INC. (XNAS:CPRT)
RYANAIR HOLDINGS PUBLIC LIMITED COMPANY (XNAS:RYAAY)
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC (XNAS:EXPD)
J. B. HUNT TRANSPORT SERVICES, INC. (XNAS:JBHT)
BNGOW
Current Analyst Ratings
Strong buy�8%
Buy�13%
Hold�33%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
2/28/22
Revenue:
7.62B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
4.07B
3.55B
-
-
2.01B
-
-
2.01B
266.00K
90.34M
395.45M
1.94B
1.54B
1.21B
1.45B
240.29M
1.21B
Statement of Cash Flow
Date:
Period:
97.95M
Differed Income Tax :
22.89M
Stock Based Compensation :
36.50M
Change in Working Capital :
- 214192.00K
Accounts Receivables:
- 27742.00K
Other Working Capital:
- 74824.00K
Other Non-Cash Items:
- 12178.00K
Net Cash Provided by Operating Activities:
262.14M
Investments in PP&E:
-
Net Acquisitions:
- 35725.00K
Purchases of Investments:
- 8738.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
8/31/21
2022
Q1
79.75M
-
79.75M
938.61M
1.31B
148.96M
2.48B
1.46B
2.92B
403.98M
295.27M
-
295.32M
5.38B
-
7.86B
202.97M
1.32B
-
-
747.60M
2.27B
1.47B
418.40M
2.28B
-
4.55B
1.63B
8.11B
- 30266.0K
- 6395493.00K
August 31, 2021 at 6:00:00 AM
6.08B
3.31B
7.86B
-
2.78B
2.7B
-
- 39858.00K
- 84321.00K
- 250000.00K
-
- 659235.00K
- 79135.00K
398.29M
- 590084.00K
- 1627.00K
- 413891.00K
79.75M
493.64M
262.14M
- 48748.00K
213.39M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
CTAS
2023
2024
2025
2026
2027
$457.14
$501.03
$549.14
$601.87
$659.66