Cintas Corporation (CTAS - Free Report) can currently be considered a smart choice for investors seeking exposure in the uniform-related space. It boasts solid growth prospects, evident from positive revision in earnings estimates, and has solid fundamentals.
The Cincinnati, OH-based company currently has a Zacks Rank #2 (Buy) and a VGM Score of B. It belongs to the Zacks Uniform and Related industry, which belongs to the broader Zacks Industrial Products sector.
The industry is currently placed in the top 12% (with the Zacks Industry Rank #31) of more than 250 Zacks industries. Notably, the top 50% of the Zacks-ranked industries tend to outperform the bottom 50% by a factor of more than 2 to 1.
Below we discussed why it is worth investing in Cintas.
Healthy Performance and Solid Growth Prospects: The company has surpassed estimates in all of the past four quarters, with a positive earnings surprise of 8.5%, on average. In the second quarter of fiscal 2020 (ended Nov 30, 2019), its earnings of $2.27 per share surpassed the Zacks Consensus Estimate by 11.27%.
We believe that impressive financial results helped drive sentiments for the stock. Notably, the company’s shares gained 3.2% since the release of results on Dec 17, 2019, whereas the industry grew 2.1%.
Cintas anticipates delivering better results in fiscal 2020 (ending May 2020). It raised earnings projection for the fiscal year to $8.65-$8.75 per share from previously mentioned $8.47-$8.57.
Also, the company’s earnings estimates have been revised positively in the past 30 days. Currently, the Zacks Consensus Estimate for its earnings is pegged at $8.79 for fiscal 2020 and $9.61 for fiscal 2021 (ending May 2021), reflecting 1.9% and 1.5% rise from the respective 30-day-ago figures.
Cintas Corporation Price and Consensus