Head-To-Head Contrast: Cintas (NASDAQ:CTAS) vs. Healthcare Services Group (NASDAQ:HCSG)

Cintas (NASDAQ:CTAS) and Healthcare Services Group (NASDAQ:HCSG) are both business services companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, dividends, risk, valuation, profitability and analyst recommendations.

Profitability

This table compares Cintas and Healthcare Services Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cintas	17.54%	40.41%	19.17%
Healthcare Services Group	2.20%	12.23%	7.52%

Valuation & Earnings

This table compares Cintas and Healthcare Services Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cintas	$10.56 billion	6.96	$1.81 billion	$4.41	41.47
Healthcare Services Group	$1.81 billion	0.70	$39.47 million	$0.54	33.40

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

Insider & Institutional Ownership

63.5% of Cintas shares are owned by institutional investors. Comparatively, 98.0% of Healthcare Services Group shares are owned by institutional investors. 14.9% of Cintas shares are owned by company insiders. Comparatively, 2.6% of Healthcare Services Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Cintas pays an annual dividend of $1.80 per share and has a dividend yield of 1.0%. Healthcare Services Group pays an annual dividend of $0.86 per share and has a dividend yield of 4.8%. Cintas pays out 40.8% of its earnings in the form of a dividend. Healthcare Services Group pays out 159.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Cintas has raised its dividend for 42 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and target prices for Cintas and Healthcare Services Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cintas	2	4	6	1	2.46
Healthcare Services Group	0	3	3	0	2.50

Cintas currently has a consensus price target of $222.09, suggesting a potential upside of 21.43%. Healthcare Services Group has a consensus price target of $19.25, suggesting a potential upside of 6.74%. Given Cintas’ higher possible upside, equities analysts plainly believe Cintas is more favorable than Healthcare Services Group.

Volatility & Risk

Cintas has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500. Comparatively, Healthcare Services Group has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500.

Summary

Cintas beats Healthcare Services Group on 15 of the 18 factors compared between the two stocks.

About Cintas

Cintas Corporation engages in the provision of corporate identity uniforms and related business services primarily in the United States, Canada, and Latin America. 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, as well as sells uniforms. In addition, the company offers first aid and safety services, and fire protection products and services. It provides 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. The company was founded in 1968 and is based in Cincinnati, Ohio. Cintas Corporation was formerly a subsidiary of Cintas Corporation.

About Healthcare Services Group

Healthcare Services Group, Inc. provides management, administrative, and operating services to the housekeeping, laundry, linen, facility maintenance, and dietary service departments of nursing homes, retirement complexes, rehabilitation centers, and hospitals in the United States. It operates through two segments, Housekeeping and Dietary. The Housekeeping segment engages in the cleaning, disinfecting, and sanitizing of resident rooms and common areas of the customers' facilities, as well as laundering and processing of the bed linens, uniforms, resident personal clothing, and other assorted linen items utilized at the customers' facilities. The Dietary segment provides food purchasing, meal preparation, and professional dietitian services, which include the development of menus that meet the dietary needs of residents; and on-site management and clinical consulting services to facilities. It serves long-term and post-acute care facilities, hospitals, and the healthcare industry through referrals and solicitation of target facilities. The company was incorporated in 1976 and is based in Bensalem, Pennsylvania.