Cintas (NASDAQ:CTAS) vs. Rollins (NYSE:ROL) Critical Contrast

Cintas (NASDAQ:CTAS) and Rollins (NYSE:ROL) are both large-cap industrials companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, profitability, risk, analyst recommendations, institutional ownership, dividends and earnings.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cintas	$11.56 billion	7.68	$2.00 billion	$5.07	44.08
Rollins	$3.99 billion	4.49	$526.71 million	$1.09	34.35

Cintas has higher revenue and earnings than Rollins. Rollins 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 0.86, indicating that its share price is 14% less volatile than the S&P 500. Comparatively, Rollins has a beta of 0.73, indicating that its share price is 27% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Cintas	17.82%	42.57%	20.07%
Rollins	13.19%	39.43%	16.89%

Dividends

Cintas pays an annual dividend of $2.08 per share and has a dividend yield of 0.9%. Rollins pays an annual dividend of $0.80 per share and has a dividend yield of 2.1%. Cintas pays out 41.0% of its earnings in the form of a dividend. Rollins pays out 73.4% 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 42 consecutive years and Rollins has increased its dividend for 4 consecutive years.

Institutional & Insider Ownership

63.5% of Cintas shares are owned by institutional investors. Comparatively, 51.8% of Rollins shares are owned by institutional investors. 14.4% of Cintas shares are owned by company insiders. Comparatively, 5.8% of Rollins shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Cintas and Rollins, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cintas	1	6	10	0	2.53
Rollins	3	11	3	1	2.11

Cintas presently has a consensus target price of $218.62, indicating a potential downside of 2.18%. Rollins has a consensus target price of $39.25, indicating a potential upside of 4.82%. Given Rollins’ higher probable upside, analysts plainly believe Rollins is more favorable than Cintas.

Summary

Cintas beats Rollins 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 Rollins

Rollins, Inc., through its subsidiaries, provides pest and wildlife control services to residential and commercial customers in the United States and internationally. The company offers pest control services to residential properties protecting from common pests, including rodents, insects, and wildlife. It also provides workplace pest control solutions for customers across various end markets, such as healthcare, foodservice, and logistics. In addition, the company offers termite protection services and ancillary services. It serves clients directly, as well as through franchisee operations. The company was formerly known as Rollins Broadcasting, Inc and changed its name to Rollins, Inc. in 1965. Rollins, Inc. was founded in 1901 and is headquartered in Atlanta, Georgia.