General Finance Corporation (GFN) vs. Cintas Corporation (CTAS) Critical Analysis
General Finance Corporation (NASDAQ: GFN) and Cintas Corporation (NASDAQ:CTAS) are both business services companies, but which is the better business? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.
This is a summary of current ratings and recommmendations for General Finance Corporation and Cintas Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|General Finance Corporation||0||0||2||0||3.00|
General Finance Corporation currently has a consensus target price of $7.60, suggesting a potential upside of 49.02%. Cintas Corporation has a consensus target price of $133.78, suggesting a potential upside of 0.04%. Given General Finance Corporation’s stronger consensus rating and higher probable upside, research analysts plainly believe General Finance Corporation is more favorable than Cintas Corporation.
Earnings and Valuation
This table compares General Finance Corporation and Cintas Corporation’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|General Finance Corporation||$275.92 million||0.49||$55.88 million||($0.25)||-20.40|
|Cintas Corporation||$5.32 billion||2.65||$1.05 billion||$4.38||30.53|
Cintas Corporation has higher revenue and earnings than General Finance Corporation. General Finance Corporation is trading at a lower price-to-earnings ratio than Cintas Corporation, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
General Finance Corporation has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500. Comparatively, Cintas Corporation has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500.
Insider & Institutional Ownership
19.2% of General Finance Corporation shares are owned by institutional investors. Comparatively, 66.4% of Cintas Corporation shares are owned by institutional investors. 25.8% of General Finance Corporation shares are owned by insiders. Comparatively, 19.1% of Cintas Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
This table compares General Finance Corporation and Cintas Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|General Finance Corporation||-0.90%||-1.37%||-0.37%|
Cintas Corporation pays an annual dividend of $1.33 per share and has a dividend yield of 1.0%. General Finance Corporation does not pay a dividend. Cintas Corporation pays out 30.4% of its earnings in the form of a dividend. Cintas Corporation has raised its dividend for 34 consecutive years.
Cintas Corporation beats General Finance Corporation on 11 of the 16 factors compared between the two stocks.
About General Finance Corporation
General Finance Corporation is a specialty rental services company. The Company offers a range of portable storage units, including its core 20-feet and 40-feet steel containers, office container, mobile office and modular space products and steel tanks. It has two geographic areas that include its four operating segments: the Asia-Pacific area, consisting of the leasing operations of Royal Wolf Holdings Limited and its Australian and New Zealand subsidiaries (Royal Wolf), and North America, consisting of the combined leasing operations of Pac-Van, Inc. and its Canadian subsidiary, PV Acquisition Corp. (Pac-Van) and Lone Star Tank Rental Inc. (Lone Star), and the manufacturing operations of GFN Manufacturing Corporation and its subsidiary, Southern Frac, LLC (Southern Frac). As of June 30, 2016, the Company provided its storage solutions to over 41,000 customers across a range of industries, including commercial, construction, retail, transportation, education and others.
About Cintas Corporation
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.
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