) recently raised its quarterly dividend by 10 cents to 64 cents
per share. This marks the 30th consecutive dividend hike for the
company and translates into a 19% increase from the prior
dividend of 54 cents. The increased dividend will be paid on
December 12, 2012, to stockholders of record as of November 9,
2012. Shares of Cintas inched up 0.4% to $42.35 on the break of
The dividend hike comes almost after a year. On October 18,
2011, Cintas had upped its dividend by 10% to 54 cents per share.
The company has consistently hiked its dividend each year since
1983, when it went public.
The dividend hike comes on the back of the company's first
quarter 2013 results. Cintas' earnings per share were 60 cents,
up 15% from 52 cents in the year-earlier period, outperforming
the Zacks Consensus Estimate by a penny.
Cintas reported revenues of $1.05 billion in the quarter,
missing the Zacks Consensus Estimate of $1.06 billion but
improved 3.4% year over year. Organic growth in the quarter was
Cintas, in fiscal 2013, expects to generate revenues in the
band of $4.25 billion to $4.35 billion and earnings in a range of
$2.50 to $2.58 per share. The Zacks Consensus Estimate is pegged
at $2.55 per share, closer to the higher end of the guidance.
Cintas continues to focus on strengthening its balance sheet
and improving cash flow. The company's debt-to-capital ratio was
a manageable 37.8% as of August 31, 2012 flat compared with
August 31, 2011. As of August 31, 2010, Cintas had $319 million
in cash and cash equivalents on its balance sheet, twice the
$150.3 million held on August 31, 2011.
The dividend hike, together with Cintas' share buyback
program, continued to enhance shareholder value. In the first
quarter, Cintas purchased 1.8 million shares of its common stock
at an aggregate price of $70.6 million. The company has $299.8
million available for share buyback program under its
authorization as of August 31, 2012. It is expected that the
share buyback program during the fourth quarter will benefit
earnings by roughly 3 cents per share.
Cintas faces severe challenges from the soft European market.
The document management segment was affected during the reported
quarter due to lower recycled paper prices. If paper price
remains low, it may weigh on margins going forward. Moreover,
higher cotton price remain a headwind for the company in the
However, Cintas continues with its focus on selling profitable
business and cost cutting initiatives, which bodes well for its
future performance. Moreover, the company has a healthy balance
sheet to finance future acquisitions.
Cincinnati, Ohio-based Cintas Corporation designs,
manufactures and implements corporate identity uniform programs,
and provides entrance mats, restroom supplies, promotional
products, and first aid and safety products for approximately
900,000 businesses. The company retains a short-term Zacks #2
CINTAS CORP (CTAS): Free Stock Analysis
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