Contrasting Cintas (NASDAQ:CTAS) and Acacia Research (ACTG)

Cintas (NASDAQ: CTAS) and Acacia Research (NASDAQ:ACTG) are both industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, earnings, dividends and risk.

Profitability

This table compares Cintas and Acacia Research’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cintas 9.23% 23.23% 8.94%
Acacia Research 145.12% 50.75% 46.80%

Insider & Institutional Ownership

66.7% of Cintas shares are owned by institutional investors. Comparatively, 67.1% of Acacia Research shares are owned by institutional investors. 18.9% of Cintas shares are owned by insiders. Comparatively, 7.7% of Acacia Research shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

Cintas has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500. Comparatively, Acacia Research has a beta of 1.21, suggesting that its share price is 21% more volatile than the S&P 500.

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cintas 1 7 5 0 2.31
Acacia Research 1 0 1 0 2.00

Cintas currently has a consensus price target of $151.10, suggesting a potential downside of 6.76%. Acacia Research has a consensus price target of $6.50, suggesting a potential upside of 71.05%. Given Acacia Research’s higher probable upside, analysts clearly believe Acacia Research is more favorable than Cintas.

Earnings and Valuation

This table compares Cintas and Acacia Research’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cintas $5.32 billion 3.24 $480.70 million $4.47 36.25
Acacia Research $152.70 million 1.26 -$54.06 million $2.40 1.58

Cintas has higher revenue and earnings than Acacia Research. Acacia Research 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%. Acacia Research does not pay a dividend. Cintas pays out 36.2% of its earnings in the form of a dividend. Cintas has raised its dividend for 35 consecutive years.

Summary

Cintas beats Acacia Research on 10 of the 17 factors compared between the two stocks.

Cintas Company Profile

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.

Acacia Research Company Profile

Acacia Research Corporation, through its subsidiaries, invests in, licenses and enforces patented technologies. The Company’s operating subsidiaries partner with inventors and patent owners, applying their legal and technology expertise to patent assets to unlock the financial value in their patented inventions. The Company’s operating subsidiaries assist patent owners with the prosecution and development of their patent portfolios, the protection of their patented inventions from unauthorized use, the generation of licensing revenue from users of their patented technologies and, where necessary, with the enforcement against unauthorized users of their patented technologies through the filing of patent infringement litigation. The Company’s operating subsidiaries own or control the rights to multiple patent portfolios, which include the United States patents and certain foreign counterparts, covering technologies used in a range of industries.

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