PVH (PVH) vs. Cintas (NASDAQ:CTAS) Critical Review

Cintas (NASDAQ: CTAS) and PVH (NYSE:PVH) are both large-cap industrial products companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Analyst Ratings

This is a summary of recent recommendations for Cintas and PVH, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cintas 1 6 5 1 2.46
PVH 0 4 14 0 2.78

Cintas presently has a consensus price target of $166.10, suggesting a potential downside of 8.86%. PVH has a consensus price target of $159.11, suggesting a potential upside of 1.84%. Given PVH’s stronger consensus rating and higher probable upside, analysts clearly believe PVH is more favorable than Cintas.

Dividends

Cintas pays an annual dividend of $1.62 per share and has a dividend yield of 0.9%. PVH pays an annual dividend of $0.15 per share and has a dividend yield of 0.1%. Cintas pays out 35.8% of its earnings in the form of a dividend. PVH pays out 1.9% 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 increased its dividend for 35 consecutive years. Cintas is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

66.3% of Cintas shares are owned by institutional investors. Comparatively, 96.4% of PVH shares are owned by institutional investors. 18.9% of Cintas shares are owned by company insiders. Comparatively, 1.0% of PVH shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Cintas 11.69% 22.86% 8.54%
PVH 6.03% 12.03% 5.44%

Valuation and Earnings

This table compares Cintas and PVH’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cintas $5.32 billion 3.65 $480.70 million $4.53 40.23
PVH $8.91 billion 1.35 $537.80 million $7.94 19.68

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

Risk and Volatility

Cintas has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500. Comparatively, PVH has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500.

Summary

Cintas beats PVH on 10 of the 18 factors compared between the two stocks.

Cintas Company Profile

Cintas Corporation provides corporate identity uniforms and related business services primarily in North America, Latin America, Europe, and Asia. It operates through Uniform Rental and Facility Services; First Aid and Safety Services; and All Other segments. The company rents and services uniforms and other garments, including flame resistant clothing, mats, mops and shop towels, and other ancillary items; and provides restroom cleaning services and supplies, and carpet and tile cleaning services, as well as sells uniforms directly. It also offers first aid and safety services, and fire protection products and services. The company offers its products and services through its distribution network and local delivery routes, or local representatives to small service and manufacturing companies, as well as major corporations. Cintas Corporation was founded in 1968 and is based in Cincinnati, Ohio.

PVH Company Profile

PVH Corp. operates as an apparel company in North America and internationally. The company operates through six segments: Calvin Klein North America, Calvin Klein International, Tommy Hilfiger North America, Tommy Hilfiger International, Heritage Brands Wholesale, and Heritage Brands Retail. It designs, markets, and retails men's and women's apparel and accessories, including branded dress shirts, dresses, suits, neckwear, sportswear, jeans wear, performance and intimate apparel, underwear, swimwear, swim products, handbags, luggage products, footwear, golf apparel, sleepwear and loungewear, eyewear and fragrances, cosmetics, skincare products and toiletries, socks and tights, jewelry, watches, outerwear, small leather goods, and furnishings, as well as other related products. The company offers its products under its own brands, such as Calvin Klein, Tommy Hilfiger, Van Heusen, IZOD, ARROW, Warner's, Olga, Eagle, and True&Co.; and licensed brands comprising Speedo, Geoffrey Beene, Kenneth Cole New York, Kenneth Cole Reaction, MICHAEL Michael Kors, Michael Kors Collection, DKNY, and Chaps, as well as various other licensed and private label brands. It also licenses its own brands over various products. The company distributes its products at wholesale in department, chain, and specialty stores, as well as through warehouse clubs, mass market and off-price retailers, and independent retailers; and through company-operated full-price specialty and outlet stores, as well as through digital commerce sites. PVH Corp. was founded in 1881 and is based in New York, New York.

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