Exponent (EXPO) vs. Cintas (NASDAQ:CTAS) Financial Analysis

Cintas (NASDAQ: CTAS) and Exponent (NASDAQ:EXPO) are both industrial products companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Cintas and Exponent, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cintas 1 7 2 0 2.10
Exponent 0 1 1 0 2.50

Cintas currently has a consensus target price of $141.75, indicating a potential downside of 9.30%. Exponent has a consensus target price of $79.50, indicating a potential upside of 7.07%. Given Exponent’s stronger consensus rating and higher possible upside, analysts clearly believe Exponent is more favorable than Cintas.

Earnings and Valuation

This table compares Cintas and Exponent’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cintas $5.32 billion 3.12 $480.70 million $5.08 30.76
Exponent $315.08 million 6.08 $47.48 million $2.05 36.22

Cintas has higher revenue and earnings than Exponent. Cintas is trading at a lower price-to-earnings ratio than Exponent, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

66.9% of Cintas shares are owned by institutional investors. Comparatively, 88.6% of Exponent shares are owned by institutional investors. 18.9% of Cintas shares are owned by insiders. Comparatively, 2.8% of Exponent shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

Cintas pays an annual dividend of $1.62 per share and has a dividend yield of 1.0%. Exponent pays an annual dividend of $0.84 per share and has a dividend yield of 1.1%. Cintas pays out 31.9% of its earnings in the form of a dividend. Exponent pays out 41.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Cintas has raised its dividend for 34 consecutive years.

Risk and Volatility

Cintas has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500. Comparatively, Exponent has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500.

Profitability

This table compares Cintas and Exponent’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cintas 9.79% 23.71% 9.70%
Exponent 16.46% 17.21% 11.99%

Summary

Cintas beats Exponent on 9 of the 17 factors compared between the two stocks.

About Cintas

Cintas Corporation is a provider of corporate identity uniforms through rental and sales programs, as well as a provider of related business services, including entrance mats, restroom cleaning services and supplies, carpet and tile cleaning services, first aid and safety services and fire protection products and services. Its segments include uniform rental and facility services, and first aid and safety services. Its uniform rental and facility service segment offers services, which include rental and servicing of uniforms and other garments, including flame resistant clothing, mats, mops and shop towels, and other ancillary items. Its first aid and safety service segment offers services, which include first aid and safety products and services. Rental processing plants, rental branches, first aid and safety facilities, fire protection facilities, direct sales offices, distribution centers and manufacturing facilities are all utilized by the businesses included in All Other.

About Exponent

Exponent, Inc. (Exponent), along with its subsidiaries, is a science and engineering consulting company. Exponent provides engineering and scientific consulting services to clients around the world. Its service offerings are provided on a project-by-project basis. It operates in two segments: Engineering and Other Scientific, and Environmental and Health. Its Engineering and Other Scientific segment includes biomechanics, biomedical engineering, buildings and structures, civil engineering, construction consulting, materials and corrosion engineering, mechanical engineering, polymer science and materials chemistry, statistical and data sciences, thermal sciences and vehicle analysis services. Its Environmental and Health segment includes chemical regulation and food safety; ecological and biological sciences; environmental and earth sciences, and health sciences. Exponent serves clients in automotive, government, health, insurance, manufacturing and technology, among others.

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