Comparing Cintas (NASDAQ:CTAS) & Sodexo (OTCMKTS:SDXAY)

Cintas (NASDAQ:CTAS) and Sodexo (OTCMKTS:SDXAY) are both business services companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, risk, valuation, profitability, institutional ownership and dividends.

Volatility and Risk

Cintas has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500. Comparatively, Sodexo has a beta of 0.51, meaning that its stock price is 49% less volatile than the S&P 500.

Institutional and Insider Ownership

63.5% of Cintas shares are held by institutional investors. 14.9% of Cintas shares are held by company insiders. Comparatively, 1.0% of Sodexo shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for Cintas and Sodexo, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cintas	1	7	5	1	2.43
Sodexo	1	5	1	0	2.00

Cintas currently has a consensus target price of $215.17, indicating a potential upside of 24.84%. Given Cintas’ stronger consensus rating and higher possible upside, equities analysts clearly believe Cintas is more favorable than Sodexo.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Cintas	17.57%	41.47%	19.36%
Sodexo	N/A	N/A	N/A

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cintas	$11.03 billion	6.25	$1.81 billion	$3.54	48.69
Sodexo	$26.49 billion	0.30	$765.33 million	N/A	N/A

Cintas has higher earnings, but lower revenue than Sodexo.

Dividends

Cintas pays an annual dividend of $1.80 per share and has a dividend yield of 1.0%. Sodexo pays an annual dividend of $0.45 per share and has a dividend yield of 4.2%. Cintas pays out 50.8% of its earnings in the form of a dividend. Cintas has raised its dividend for 42 consecutive years.

Summary

Cintas beats Sodexo on 13 of the 16 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 Sodexo

Sodexo S.A. provides food services and facilities management services worldwide. It offers various on-site services, which includes corporate services, energy and resources, government and agencies, and other services; healthcare and seniors; and learning solutions to schools and universities. The company also provides food services comprising retail service, food delivery, and meal and food vouchers, as well as digital food ordering services; savings and purchase solutions, data and digital tools, and advisory services and client support; and work-life balance and employee experience solutions. In addition, it offers facility management services, including technical service management, assets management, building maintenance, access control, deep cleaning, energy management, space planning, project management, front-of-house services, grounds maintenance, waste management, HVAC systems, mail management, commercial cleaning, workspace management, and pest control. services. The company was formerly known as Sodexho Alliance and changed its name to Sodexo S.A. in 2008. Sodexo S.A. was founded in 1966 and is headquartered in Issy-les-Moulineaux, France.