Perry Ellis International (PERY) versus Cintas (CTAS) Financial Analysis

Perry Ellis International (NASDAQ: PERY) and Cintas (NASDAQ:CTAS) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, dividends, earnings and risk.

Profitability

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This table compares Perry Ellis International and Cintas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Perry Ellis International 6.48% 9.55% 5.47%
Cintas 11.69% 22.86% 8.54%

Volatility & Risk

Perry Ellis International has a beta of 0.43, indicating that its stock price is 57% less volatile than the S&P 500. Comparatively, Cintas has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500.

Insider and Institutional Ownership

74.4% of Perry Ellis International shares are held by institutional investors. Comparatively, 66.6% of Cintas shares are held by institutional investors. 22.2% of Perry Ellis International shares are held by company insiders. Comparatively, 18.9% of Cintas shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Perry Ellis International and Cintas, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Perry Ellis International 0 2 4 0 2.67
Cintas 1 6 5 1 2.46

Perry Ellis International currently has a consensus target price of $30.00, indicating a potential upside of 10.74%. Cintas has a consensus target price of $166.10, indicating a potential downside of 0.38%. Given Perry Ellis International’s stronger consensus rating and higher probable upside, equities analysts clearly believe Perry Ellis International is more favorable than Cintas.

Earnings & Valuation

This table compares Perry Ellis International and Cintas’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Perry Ellis International $874.85 million 0.49 $56.65 million $2.13 12.72
Cintas $5.32 billion 3.34 $480.70 million $4.53 36.81

Cintas has higher revenue and earnings than Perry Ellis International. Perry Ellis International is trading at a lower price-to-earnings ratio than Cintas, indicating that it is currently the more affordable of the two stocks.

Dividends

Cintas pays an annual dividend of $1.62 per share and has a dividend yield of 1.0%. Perry Ellis International does not pay a dividend. Cintas pays out 35.8% of its earnings in the form of a dividend. Cintas has increased its dividend for 35 consecutive years.

Summary

Cintas beats Perry Ellis International on 13 of the 18 factors compared between the two stocks.

About Perry Ellis International

Perry Ellis International, Inc. designs, sources, markets, and licenses apparel products and accessories. The company operates through Men's Sportswear and Swim, Women's Sportswear, Direct-to-Consumer, and Licensing segments. It offers men's wear, such as career and casual sportswear, golf apparel, sports apparel, swimwear, activewear, and accessories; and women's wear, including dresses, sportswear, swimwear, activewear, and accessories. The company provides its products under various brands comprising Ben Hogan, Cubavera, Farah, Grand Slam, Jantzen, Laundry by Shelli Segal, Original Penguin by Munsingwear, Perry Ellis, Rafaella, and Savane. It also licenses the Callaway Golf, PGA TOUR, and Jack Nicklaus brands for golf apparel; the Jag brand for swimwear and cover-ups; and the Nike brand for swimwear and accessories, as well as Pro Player, John Henry, and Gotcha brands. The company distributes its products to wholesale customers that represent various levels of retail distribution, including luxury stores, department stores, national and regional chain stores, mass merchants, specialty stores, sporting goods stores, the corporate wear market, and e-commerce, as well as clubs and independent retailers. As of April 1, 2017, it operated 38 Perry Ellis, 14 Original Penguin, and 2 multi-brand retail outlet stores located primarily in upscale retail outlet malls in the United States, the United Kingdom, and Puerto Rico; and 2 Perry Ellis, 2 Cubavera, 12 Original Penguin, and 1 multi-brand full price retail stores located in upscale demographic markets in the United States and the United Kingdom. The company was formerly known as Supreme International Corporation and changed its name to Perry Ellis International, Inc. in 1999. Perry Ellis International, Inc. was founded in 1967 and is headquartered in Miami, Florida.

About Cintas

Cintas Corporation provides corporate identity uniforms and related business services primarily in North America, Latin America, Europe, and Asia. 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, and carpet and tile cleaning services, as well as sells uniforms directly. It also offers first aid and safety services, and fire protection products and services. The company offers 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. Cintas Corporation was founded in 1968 and is based in Cincinnati, Ohio.

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