Head to Head Survey: Sodexo (OTCMKTS:SDXAY) and Cintas (NASDAQ:CTAS)

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

Insider and Institutional Ownership

63.5% of Cintas shares are held by institutional investors. 1.0% of Sodexo shares are held by insiders. Comparatively, 14.9% of Cintas shares are held by 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.

Risk & Volatility

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

Analyst Recommendations

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

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

Cintas has a consensus price target of $215.17, indicating a potential upside of 27.84%. Given Cintas’ stronger consensus rating and higher possible upside, analysts clearly believe Cintas is more favorable than Sodexo.

Profitability

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

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

Dividends

Sodexo pays an annual dividend of $0.45 per share and has a dividend yield of 4.1%. Cintas pays an annual dividend of $1.80 per share and has a dividend yield of 1.1%. Cintas pays out 50.8% of its earnings in the form of a dividend. Cintas has increased its dividend for 42 consecutive years.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sodexo	$26.49 billion	0.31	$765.33 million	N/A	N/A
Cintas	$10.34 billion	6.51	$1.81 billion	$3.54	47.55

Cintas has lower revenue, but higher earnings than Sodexo.

Summary

Cintas beats Sodexo on 13 of the 16 factors compared between the two stocks.

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.

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.