Higher employment fuels Cintas’s growth

Article Excerpt

CINTAS CORP. $199 (Nasdaq symbol CTAS; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 104.5 million; Market cap: $20.8 billion; Price-to-sales ratio: 3.1; Dividend yield: 1.0%; TSINetwork Rating: Average; www.cintas.com) designs, manufactures and rents uniforms to over 1 million businesses, mainly in North America. It also supplies those clients with related products such as mats, towels, mops and cleaning supplies. Together, those businesses contribute roughly 80% of the company’s revenue, and 90% of its earnings. The remaining 20% of revenue and 10% of earnings come from selling uniforms, as well as first-aid kits, fire extinguishers, sprinklers and emergency-exit lights. A shrewd acquisition In March 2017, Cintas completed its purchase of Minnesota-based G&K Services Inc. That firm supplies corporate uniforms and other services. It has 165 facilities across the U.S. and Canada. Cintas paid $2.2 billion, which included G&K’s debt. The company expects the elimination of overlapping operations will let it cut between $130 million and $140 million from its overall annual costs by…