On June 1, 2023, the Ontario Teachers Pension Plan Board announced that it had acquired a new position in shares of Cintas Co. (NASDAQ:CTAS). According to their most recent 13F filing with the Securities & Exchange Commission, the firm acquired 445 shares of the business services provider’s stock, valued at approximately $201,000.
Cintas Corp. is primarily engaged in the provision of corporate identity uniforms through rental and sales programs. It operates through three segments: Uniform Rental and Facility Services, First Aid and Safety Services, and All Other. The Uniform Rental and Facility Services segment consist of rental and servicing of uniforms and other garments including flame-resistant clothing, mats, mops and shop towels, as well as other ancillary items.
Shares of Cintas stock opened at $472.14 on Thursday. With a current market cap of $48.02 billion and a price-to-earnings-growth ratio of 3.20, Cintas remains a strong player in their industry.
Despite being impacted by COVID-19 pandemic-related disruptions like many businesses across the globe have been facing since early 2020, Cintas has remained resilient thanks to its diverse operations portfolio which has helped them mitigate some effects associated with these challenges that adversly affected uniform rentals across many industries they are involved in.
For example In November last year Delta Air Lines Inc., one of their longtime customers reduced its uniform rental arrangement with them due to pandemic related cutbacks in operations resulting from travel restrictions across many parts of the world.
However irrespective of such sector specific impacts experienced during this period CTAS still saw an increase in demand for some products related to first aid kits for companies while safety compliance assessment services also received increased interest from clients.
Therefore counting on it’s proven history making moves towards financial stability,the news regarding Ontario Teachers Pension Plan Board ‘s latest share acquisition make complete sense particularly given CTAS’s recent good financial standing and publicly declared commitment to focus and improve their safety and health equipment offerings.
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Cintas Attracts Investor Interest with Strong Earnings Results and Dividend Payout Ratio Concerns
Cintas, the business services provider that is primarily known for its rental and sale of corporate identity uniforms, has been a topic of interest among analysts and investors. The company has recently seen several large investors add to or reduce their stakes in the company. These include HWG Holdings LP, Quent Capital LLC, Fiduciary Alliance LLC, Exchange Traded Concepts LLC, and Mitsubishi UFJ Morgan Stanley Securities Co. Ltd. As a result of these transactions, 61.92% of the stock is currently owned by institutional investors.
The attention from investors is not surprising given Cintas’ recent earnings results. For the quarter ending March 29th, the company reported $3.14 EPS – beating analysts’ consensus estimates of $3.01 by $0.13 – on revenue of $2.19 billion. This represents an 11.7% increase in revenue over the same period last year.
Additionally, three major firms – Argus, Robert W Baird, and Stifel Nicolaus – have recently raised their price targets on CTAS shares to between $500 and $512 per share.
Despite this positive momentum for Cintas, there have also been some concerns raised regarding its dividend payout ratio (DPR), which currently stands at 36.92%. However, the company has announced its intention to pay a quarterly dividend of $1.15 per share on June 15th to shareholders of record as of May 15th.
Overall, with strong financial performance and increasing investor interest in CTAS shares, it appears that Cintas may continue to be a focus for those seeking growth opportunities within the business services industry in the coming months and years ahead.