If you watched “Cintas” NASDAQ:CTAS stock prices have been rising over the past decade and may have been waiting for a sharp drop after a stock split to buy or buy more, your hopes have been realized. The share price began correcting in early December, turning into a full-fledged C-cap correction with the release of Q2 2025 results. With shares down 20% since the release, there’s a good chance that Cintas’ share price is close to its bottom and it will soon be time to buy again.
Feeds today
(As of 5:31 p.m. ET)
- 52 week range
- $142.18
▼
$228.12
- Dividend yield
- 0.83%
- P/E ratio
- 47.21
- Target price
- $195.90
Cintas’ second-quarter results were solid; they were good, with growth and strong profitability, supporting the health of the balance sheet and return on capital. The only problem is that results were mixed relative to consensus, and trading at nearly 50 times earnings estimates, the growth was likely priced in. This high-quality cash flow and capital return machine is now trading at a still high, but more reasonable, price of 43 times. forecast for 2025, but more importantly, it’s 23 times longer-term forecasts, making it a bargain. Analysts expect earnings to double over the next ten years, an achievable and potentially cautious estimate given trends.
Cintas falls due to mixed results; Supports growth and increases profits
Cintas had a good quarter, and its second-quarter results didn’t give the market any reason to sell off. Revenue of $2.56 billion was in line with expectations but up 7.8% year-over-year due to growth in both segments. The core segment of homogeneous goods grew by 7.6% due to growth of 8.5% in the smaller segment “Other goods”. Others include first aid business Zee Medical, fire safety and security.
Margin news is better than revenue news, leading to outperformance of net income. Gross margin increased 180 basis points and operating profit increased 210 basis points due to cost control and expense discipline. The end result is a 19.7% increase in net income and a continued margin outlook. More importantly, cash flow and free cash flow improved significantly, with free cash flow up 35% in the first six months of the year.
Leadership is another strength. The company raised its revenue and earnings forecasts, raising its low- and mid-range revenue range while significantly raising its forecast. The new income range puts the lower limit above the previous upper limit and may be cautious. Labor markets remain healthy. November data shows strong employment growth, longer working hours and ample availability.
Cintas Capital’s returns are safe, reliable and growing
Cintas dividend payment
- Dividend yield
- 0.84%
- Annual dividends
- US$1.56
- Record dividend increase
- 42 years old
- Annual dividend growth for 3 years
- 92.59%
- Dividend payout ratio
- 39.39%
- Recent dividend payment
- December 13
CTAS Dividend History
Cintas is among the highest dividend paying stocks in the market, maintaining a strong balance sheet while self-funding growth and returning capital to shareholders. Capital returns include dividends and buybacks, which reduce each year. Buybacks in the second quarter reduced this figure by an average of 0.6%.
They are expected to continue to reduce the account in the second half of the financial year and throughout 2025. The balance sheet reflects the impact of this year’s acquisitions and return of capital, with cash declining and liabilities rising. However, the net result is flat capital and treasury stock growth of 8%, while leverage remains low with long-term liabilities under 1x.
Analysts have yet to evaluate Cintas’ results, but they support price action in 2024. Consensus sentiment dropped to Hold from Moderate Buy as the share price rose to the consensus target. The revision trend has pushed the consensus target for this industrial stock up nearly 50% in 2024, putting the market at $200 in 2025. level. Institutions also supported the share price in 2024, buying shares in all four quarters of the year.
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