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Here's Why You Should Hold on to Cintas (CTAS) Stock Now
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Cintas Corporation (CTAS - Free Report) has been benefiting from strong segmental performances and product enhancement efforts despite increasing costs and forex woes.
Let’s discuss the factors that should influence investors to retain the stock for now.
Growth Catalysts
Business Strength: Solid momentum in the health care, education and government verticals is driving revenues at the Uniform Rental and Facility Services segment. The segment’s revenues rose 7.9% year over year in the first six months of fiscal 2024 (ended November 2023). High customer retention levels are boosting the First Aid and Safety Services segment’s performance. Revenues from the segment climbed 12.1% year over year in the first six months of fiscal 2024.
Product Enhancement Efforts: The company's focus on the enhancement of its product portfolio, along with investments in technology and existing facilities, should continue to drive its performance. For instance, the company’s SmartTruck technology enhances its route efficiencies and provides density to the existing routes. Also, Cintas’ focus on operational executions and pricing actions is helping it maintain healthy margin performance. For instance, in the first six months of fiscal 2024, the gross margin increased 120 basis points to 48.4% from the year-ago reported number.
Rewards to Shareholders: Cintas’ measures to reward its shareholders through dividend payments and share buybacks are noteworthy. In the first six months of fiscal 2024, dividend payments totaled $255.8 million, up 19% year over year. Cintas repurchased shares worth $423.1 million in the same period, up 21.3% year over year. The company hiked its quarterly dividend by 17.4% to $1.35 per share in July 2023. Cintas has consistently raised its dividend for 40 straight years.
Currently carrying a Zacks Rank #3 (Hold), CTAS’ shares have gained 42.5% compared with the industry’s 38.1% growth.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked companies from the Industrial Products sector are discussed below:
ATMU’s earnings estimates have increased 2% for 2024 in the past 60 days. Shares of Atmus Filtration have risen 6.7% in the past year.
Tetra Tech, Inc. (TTEK - Free Report) currently carries a Zacks Rank of 2. It delivered a trailing four-quarter average earnings surprise of 14.4%.
In the past 60 days, the Zacks Consensus Estimate for TTEK’s fiscal 2024 earnings has increased 2.9%. The stock has soared 33.2% in the past year.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently has a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 10.4%.
The Zacks Consensus Estimate for AIT’s fiscal 2024 earnings has increased 1.7% in the past 60 days. The stock has gained 29.6% in the past year.
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Here's Why You Should Hold on to Cintas (CTAS) Stock Now
Cintas Corporation (CTAS - Free Report) has been benefiting from strong segmental performances and product enhancement efforts despite increasing costs and forex woes.
Let’s discuss the factors that should influence investors to retain the stock for now.
Growth Catalysts
Business Strength: Solid momentum in the health care, education and government verticals is driving revenues at the Uniform Rental and Facility Services segment. The segment’s revenues rose 7.9% year over year in the first six months of fiscal 2024 (ended November 2023). High customer retention levels are boosting the First Aid and Safety Services segment’s performance. Revenues from the segment climbed 12.1% year over year in the first six months of fiscal 2024.
Product Enhancement Efforts: The company's focus on the enhancement of its product portfolio, along with investments in technology and existing facilities, should continue to drive its performance. For instance, the company’s SmartTruck technology enhances its route efficiencies and provides density to the existing routes. Also, Cintas’ focus on operational executions and pricing actions is helping it maintain healthy margin performance. For instance, in the first six months of fiscal 2024, the gross margin increased 120 basis points to 48.4% from the year-ago reported number.
Rewards to Shareholders: Cintas’ measures to reward its shareholders through dividend payments and share buybacks are noteworthy. In the first six months of fiscal 2024, dividend payments totaled $255.8 million, up 19% year over year. Cintas repurchased shares worth $423.1 million in the same period, up 21.3% year over year. The company hiked its quarterly dividend by 17.4% to $1.35 per share in July 2023. Cintas has consistently raised its dividend for 40 straight years.
Currently carrying a Zacks Rank #3 (Hold), CTAS’ shares have gained 42.5% compared with the industry’s 38.1% growth.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked companies from the Industrial Products sector are discussed below:
Atmus Filtration Technologies Inc. (ATMU - Free Report) presently carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 20.3%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ATMU’s earnings estimates have increased 2% for 2024 in the past 60 days. Shares of Atmus Filtration have risen 6.7% in the past year.
Tetra Tech, Inc. (TTEK - Free Report) currently carries a Zacks Rank of 2. It delivered a trailing four-quarter average earnings surprise of 14.4%.
In the past 60 days, the Zacks Consensus Estimate for TTEK’s fiscal 2024 earnings has increased 2.9%. The stock has soared 33.2% in the past year.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently has a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 10.4%.
The Zacks Consensus Estimate for AIT’s fiscal 2024 earnings has increased 1.7% in the past 60 days. The stock has gained 29.6% in the past year.