27% profits every 20 days?
This is what Nic Chahine averages with his options buys. Not selling covered calls or spreads... BUYING options. Most traders don't even have a winning percentage of 27% buying options. He has an 83% win rate. Here's how he does it.
Amidst the fast-paced and highly competitive business environment of today, conducting comprehensive company analysis is essential for investors and industry enthusiasts. In this article, we will delve into an extensive industry comparison, evaluating Cintas (NASDAQ:CTAS) in comparison to its major competitors within the Commercial Services & Supplies industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company's performance in the industry.
Cintas Background
Cintas is positioned as a one-stop-shop that rents/sells uniforms and ancillary products and services, such as mops, first aid kits, and fire inspections. In its core uniform and facility services unit (a majority of sales), Cintas provides uniform rental programs for items including but not limited to office attire, custom tailored apparel, flame-resistant clothing, lab coats, and other profession-specific clothing. Facilities products generally include the rental and sale of entrance mat, mops, shop towels, hand sanitizers, and restroom supplies. In addition, Cintas' remaining business includes a first aid and safety services business, a fire protection services business, and a uniform direct sales business.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Cintas Corp | 38.14 | 12.67 | 5.83 | 9.66% | $0.61 | $1.14 | 8.12% |
| Copart Inc | 34 | 6.98 | 10.87 | 6.01% | $0.43 | $0.46 | 12.93% |
| RB Global Inc | 60.56 | 2.42 | 3.50 | 1.58% | $0.33 | $0.53 | 128.38% |
| UniFirst Corp | 29.73 | 1.53 | 1.38 | 1.39% | $0.07 | $0.19 | 10.74% |
| Driven Brands Holdings Inc | 14.41 | 1.09 | 0.85 | 2.19% | $0.14 | $0.32 | 19.31% |
| VSE Corp | 19.65 | 1.81 | 0.68 | 1.91% | $0.03 | $0.03 | 20.89% |
| Healthcare Services Group Inc | 22.10 | 1.59 | 0.42 | -1.23% | $-0.0 | $0.03 | -0.75% |
| Liquidity Services Inc | 26.76 | 3.80 | 2.01 | 4.23% | $0.01 | $0.05 | 15.61% |
| Viad Corp | 43.27 | 30.68 | 0.42 | 111.53% | $0.04 | $0.03 | 0.35% |
| Average | 31.31 | 6.24 | 2.52 | 15.95% | $0.13 | $0.21 | 25.93% |
By conducting a comprehensive analysis of Cintas, the following trends become evident:
Notably, the current Price to Earnings ratio for this stock, 38.14, is 1.22x above the industry norm, reflecting a higher valuation relative to the industry.
With a Price to Book ratio of 12.67, which is 2.03x the industry average, Cintas might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
The stock's relatively high Price to Sales ratio of 5.83, surpassing the industry average by 2.31x, may indicate an aspect of overvaluation in terms of sales performance.
The Return on Equity (ROE) of 9.66% is 6.29% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.
The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $610 Million is 4.69x above the industry average, highlighting stronger profitability and robust cash flow generation.
With higher gross profit of $1.14 Billion, which indicates 5.43x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
With a revenue growth of 8.12%, which is much lower than the industry average of 25.93%, the company is experiencing a notable slowdown in sales expansion.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a key indicator of a company's financial health and its reliance on debt financing.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
By analyzing Cintas in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:
Cintas demonstrates a stronger financial position compared to its top 4 peers in the sector.
With a lower debt-to-equity ratio of 0.65, the company relies less on debt financing and maintains a healthier balance between debt and equity, which can be viewed positively by investors.
Key Takeaways
The PE, PB, and PS ratios for Cintas are all high compared to its peers in the Commercial Services & Supplies industry. This suggests that the stock may be overvalued based on these metrics. Additionally, Cintas has a low ROE, indicating lower profitability compared to its industry peers. However, the company has high EBITDA, gross profit, and revenue growth, which may indicate strong operational performance. Overall, Cintas' valuation analysis suggests mixed results when compared to its industry sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
27% profits every 20 days?
This is what Nic Chahine averages with his options buys. Not selling covered calls or spreads... BUYING options. Most traders don't even have a winning percentage of 27% buying options. He has an 83% win rate. Here's how he does it.
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