Analyzing Cintas (NASDAQ:CTAS) and Black Diamond Group (OTCMKTS:BDIMF)

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

Analyst Recommendations

This is a breakdown of current recommendations for Black Diamond Group and Cintas, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Black Diamond Group	0	0	1	0	3.00
Cintas	1	6	6	1	2.50

Cintas has a consensus price target of $221.08, suggesting a potential upside of 10.34%. Given Cintas’ higher probable upside, analysts clearly believe Cintas is more favorable than Black Diamond Group.

Volatility & Risk

Black Diamond Group has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500. Comparatively, Cintas has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500.

Earnings and Valuation

This table compares Black Diamond Group and Cintas”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Black Diamond Group	$294.14 million	2.83	$18.72 million	$0.41	29.51
Cintas	$10.34 billion	7.75	$1.81 billion	$3.43	58.41

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

Insider & Institutional Ownership

63.5% of Cintas shares are held by institutional investors. 25.2% of Black Diamond Group shares are held by company insiders. Comparatively, 14.9% 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.

Profitability

This table compares Black Diamond Group and Cintas’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Black Diamond Group	8.23%	10.76%	4.79%
Cintas	17.58%	41.07%	19.27%

Dividends

Black Diamond Group pays an annual dividend of $0.13 per share and has a dividend yield of 1.1%. Cintas pays an annual dividend of $1.80 per share and has a dividend yield of 0.9%. Black Diamond Group pays out 31.7% of its earnings in the form of a dividend. Cintas pays out 52.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Cintas has raised its dividend for 42 consecutive years. Black Diamond Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Cintas beats Black Diamond Group on 14 of the 18 factors compared between the two stocks.

About Black Diamond Group

Black Diamond Group Limited rents and sells modular space and workforce accommodation solutions. It operates through two segments, Modular Space Solutions and Workforce Solutions. The Modular Space Solutions segment provides modular space rentals to customers in the construction, real estate development, education, manufacturing, health care, financial, government, and defense industries in North America. Its products include office units, lavatories, storage units, large multi-unit office complexes, classroom facilities, banking and health care facilities, high security modular buildings, custom manufactured modular facilities, blast resistant structures, SmartSpace interchangeable paneled units, and storage containers. This segment also sells new and used space rentals units; and provides delivery, installation, project management, and ancillary rental items, products, and services. The Workforce Solutions segment provides workforce housing solutions, including rental of accommodations and surface equipment, and provision of turnkey lodging and travel management logistics services in Canada, the United States, and Australia. This segment also provides associated services, such as installation, transportation, dismantlement, and sale of used fleet assets. This segment primarily serves the resource, infrastructure, construction, disaster recovery, and education sectors. It also provides specialized field rentals to oil and gas industries. The company markets its rental assets, custom sales, and ancillary products and services through in-house sales personnel, its website, social media, web campaigns, and its digital marketplace. Black Diamond Group Limited was founded in 2003 and is headquartered in Calgary, Canada.

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.