Industrial Sector Ideas

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Cintas - >>> Cintas has grown sales and adjusted earnings per share (EPS) in 51 of the last 53 years by providing its 1 million business customers with uniforms, restroom supplies, first aid and safety equipment, safety training, and fire extinguishers.


https://www.fool.com/investing/2023/03/21/history-suggests-these-4-sp-500-stocks-could-soar/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


As wildly unexciting as this sounds, Cintas stock rose 1,000% over the last decade.

Powering this incredible performance is the company's ROIC of 21%, 16th best of the 69 industrial stocks in the S&P 500. Operating in a highly fragmented niche, Cintas uses a strategy of making tuck-in acquisitions to complement its organic growth in the mid to high single digits, delivering results that might be hard to believe.

Across the last decade, the company's sales, net income, and dividends grew annually by 7%, 20%, and 26%, respectively. Cintas has a payout ratio of only 35%, showing that it should easily be able to continue increasing its dividend (currently yielding 1%), just as it has since 1983.

Although the company trades at a premium P/E of 35, it only counts 6% of the total businesses in North America as customers, leaving a massive runway for growth.

Opportunistic investors might want to take advantage of any short-term dips in the share price to build a position in this operations-crucial business over time.

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