Cintas Corporation (NASDAQ: CTAS) and H&E Equipment Services (NASDAQ:HEES) are both industrial products companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, risk, dividends, institutional ownership and profitability.

Volatility and Risk

Cintas Corporation has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500. Comparatively, H&E Equipment Services has a beta of 2.49, indicating that its stock price is 149% more volatile than the S&P 500.

Institutional & Insider Ownership

64.8% of Cintas Corporation shares are owned by institutional investors. Comparatively, 75.1% of H&E Equipment Services shares are owned by institutional investors. 18.9% of Cintas Corporation shares are owned by insiders. Comparatively, 12.0% of H&E Equipment Services shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Cintas Corporation and H&E Equipment Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cintas Corporation 9.79% 23.71% 9.70%
H&E Equipment Services 4.08% 27.93% 3.09%

Dividends

Cintas Corporation pays an annual dividend of $1.33 per share and has a dividend yield of 0.9%. H&E Equipment Services pays an annual dividend of $1.10 per share and has a dividend yield of 3.8%. Cintas Corporation pays out 26.2% of its earnings in the form of a dividend. H&E Equipment Services pays out 99.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. H&E Equipment Services has increased its dividend for 34 consecutive years. H&E Equipment Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent ratings for Cintas Corporation and H&E Equipment Services, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cintas Corporation 1 7 3 0 2.18
H&E Equipment Services 0 0 2 0 3.00

Cintas Corporation presently has a consensus price target of $139.33, suggesting a potential downside of 3.43%. H&E Equipment Services has a consensus price target of $31.50, suggesting a potential upside of 7.88%. Given H&E Equipment Services’ stronger consensus rating and higher possible upside, analysts plainly believe H&E Equipment Services is more favorable than Cintas Corporation.

Valuation & Earnings

This table compares Cintas Corporation and H&E Equipment Services’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cintas Corporation $5.67 billion 2.70 $1.12 billion $5.08 28.40
H&E Equipment Services $965.22 million 1.06 $137.07 million $1.11 26.31

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

Summary

Cintas Corporation beats H&E Equipment Services on 10 of the 17 factors compared between the two stocks.

Cintas Corporation Company Profile

Cintas Corporation is a provider of corporate identity uniforms through rental and sales programs, as well as a provider of related business services, including entrance mats, restroom cleaning services and supplies, carpet and tile cleaning services, first aid and safety services and fire protection products and services. Its segments include uniform rental and facility services, and first aid and safety services. Its uniform rental and facility service segment offers services, which include rental and servicing of uniforms and other garments, including flame resistant clothing, mats, mops and shop towels, and other ancillary items. Its first aid and safety service segment offers services, which include first aid and safety products and services. Rental processing plants, rental branches, first aid and safety facilities, fire protection facilities, direct sales offices, distribution centers and manufacturing facilities are all utilized by the businesses included in All Other.

H&E Equipment Services Company Profile

H&E Equipment Services, Inc. is an integrated equipment services company. The Company is focused on heavy construction and industrial equipment. As of December 31, 2016, the Company rented, sold and provided parts and services support for four core categories of specialized equipment: hi-lift or aerial work platform equipment; cranes; earthmoving equipment, and industrial lift trucks. The Company’s principal business activities include equipment rentals; new equipment sales; used equipment sales; parts sales, and repair and maintenance services. As of February 16, 2017, the Company had 78 facilities located throughout the West Coast, Intermountain, Southwest, Gulf Coast, Southeast and Mid-Atlantic regions of the United States. The Company rents its heavy construction and industrial equipment to its customers on a daily, weekly and monthly basis. The Company sells new heavy construction and industrial equipment. The Company is a distributor of Grove and Manitowoc crane equipment.

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