Cintas Gains From Business Strength Amid Persisting Headwinds

Cintas Corporation CTAS has been witnessing solid momentum across its segments. Strength in the Uniform Rental and Facility Services segment, driven by strong growth from new customers and penetration of additional products and services into existing customers, is aiding the segment. Increasing demand for AED Rentals, eyewash stations and WaterBreak products is boosting the First Aid and Safety Services segment’s performance. Also, strong customer retention level and an improved sales mix bode well for the segment.CTAS solidified its product portfolio and leveraged business opportunities through asset additions. The company acquired Paris Uniform Services, a family-owned supplier of uniform and facility service solutions, in March 2024. The buyout enhanced Cintas’ presence in Pennsylvania, New York, Maryland and West Virginia. In February 2024, the company acquired SITEX, which strengthened its market position in the central Midwest region of the United States. It is worth noting that Cintas acquired businesses for $232.9 million in fiscal 2025 (ended June 2025).Cintas is committed to rewarding its shareholders handsomely through dividend payments and share buybacks. In fiscal 2025, the company paid dividends worth $611.6 million, up 15.2% year over year. The amount spent on share buybacks totaled $934.8 million compared with $700 million in the year-ago period. CTAS hiked its quarterly dividend by 15.4% to $1.80 per share in July 2025. Cintas has consistently raised its dividends for 41 straight years.Price Performance of CTASIn the past year, shares of this Zacks Rank #3 (Hold) company have gained 1.6% against the industry’s 1.4% decline.Image Source: Zacks Investment ResearchHowever, Cintas has been dealing with the adverse impacts of high costs. In the fourth quarter of fiscal 2025, its cost of sales (comprising costs related to uniform rental and facility services and others) increased 6.9% year over year to $1.34 billion due to higher material and labor costs. Also, selling and administrative expenses climbed 9.1% to $728.5 million in the same period due to an increase in employee-partner related expenses. Escalating costs and expenses, if left unchecked, may negatively impact profitability in the quarters ahead.CTAS has considerable exposure to regions outside the United States. Its significant international presence exposes it to political and economic disruptions, all of which can directly affect its profits. Also, the company is exposed to headwinds arising from unfavorable movements in foreign currencies.Stocks to ConsiderSome better-ranked companies are discussed below:Bowman Consulting Group Ltd. BWMN currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.BWMN delivered a trailing four-quarter average earnings surprise of 112.6%. In the past 60 days, the Zacks Consensus Estimate for Bowman Consulting’s 2025 earnings has increased 44.6%.Healthcare Services Group, Inc. HCSG presently sports a Zacks Rank of 1. The company delivered a trailing four-quarter average earnings surprise of 7.9%.In the past 60 days, the consensus estimate for HCSG’s 2025 earnings has increased 4.8%.Willdan Group, Inc. WLDN presently sports a Zacks Rank of 1. It has a trailing four-quarter average earnings surprise of 54%.The Zacks Consensus Estimate for WLDN’s 2025 earnings has increased 27.7% in the past 60 days.Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cintas Corporation (CTAS): Free Stock Analysis Report Willdan Group, Inc. (WLDN): Free Stock Analysis Report Healthcare Services Group, Inc. (HCSG): Free Stock Analysis Report Bowman Consulting Group Ltd. (BWMN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks