Updated on March 10th, 2026 by Felix Martinez
Most dividend growth investors aim for rising dividend income over time. We believe the best way to achieve this is to focus on high-quality dividend growth stocks.
For the best-in-class dividend growth stocks, consider investing in the Dividend Aristocrats, a select group of 69 companies in the S&P 500 Index with 25+ consecutive years of dividend increases.
You can see a full downloadable spreadsheet of all 69 Dividend Aristocrats, along with several important financial metrics such as dividend yields and price-to-earnings ratios, by clicking on the link below:
Disclaimer: Sure Dividend is not affiliated with S&P Global in any way. S&P Global owns and maintains The Dividend Aristocrats Index. The information in this article and the downloadable spreadsheet is based on Sure Dividend’s own review, summary, and analysis of the S&P 500 Dividend Aristocrats ETF (NOBL) and other sources, and is meant to help individual investors better understand this ETF and the index upon which it is based. None of the information in this article or spreadsheet is official data from S&P Global. Consult S&P Global for official information.
We review all 69 Dividend Aristocrats each year, and the next stock in the 2025 series is Cintas Corporation (CTAS). Cintas is a high-growth dividend stock. It has raised its dividend for 43 consecutive years, including a 15.4% increase in 2025.
Cintas raises its dividend each year, but its current yield is just 0.8%, notably below that of the broader S&P 500 Index.
This article will review Cintas in greater detail.
Business Overview
Cintas Corporation was founded in 1929 as the Acme Industrial Laundry Company. It was founded by Richard “Doc” Farmer, who started collecting chemical-soaked rags from factories and cleaning them for a fee.
After graduating from college, Doc Farmer’s grandson, Richard T. Farmer, joined the company in 1956. After gaining enough experience, he left the family business to start Cintas in 1968.
Today, it is the largest company in its industry, generating annual revenue in excess of $8 billion.
Cintas designs and manufactures corporate uniforms, entrance mats, restroom supplies, fire protection, and first aid products. The company has a large and diversified customer base, including more than 1 million businesses across North America, Latin America, Europe, and Asia.
Cintas is certainly a growth company and has been for a long time. Due to its competitive advantages, it should continue to grow in the years ahead.
Source: Investor Presentation
Growth Prospects
Cintas has enjoyed strong growth for the past several years. It saw particularly high growth rates in the years following the Great Recession, when hiring picked up and the labor market recovered. It again quickly recovered from the coronavirus pandemic last year, even though the unemployment rate spiked for an extended period.
The company continues to perform well. Cintas reported fiscal Q2 2026 revenue of $2.80 billion, representing a 9.3% year-over-year increase, while diluted EPS rose to $1.21 from $1.09, an 11.0% increase that modestly exceeded expectations. Revenue growth was driven primarily by strong demand across business segments, with organic revenue growth of 8.6% after adjusting for acquisitions and currency impacts.
Net income increased 10.4% to $495.3 million, reflecting continued expansion in core uniform rental, facility services, and safety products.
Profitability improved during the quarter as margins expanded across the business. Gross margin increased 10.6% to $1.41 billion, representing 50.4% of revenue, compared with 49.8% in the prior-year period, reflecting pricing power and operational efficiency.
Operating income rose 10.9% to $655.7 million, while operating margin improved to 23.4% from 23.1%. The company reported income before taxes of $628.5 million, while the effective tax rate increased slightly to 21.2% from 20.7%, partly influenced by stock-based compensation tax adjustments.
During the quarter, Cintas continued returning capital to shareholders through buybacks and dividends. The company repurchased $622.5 million of shares during the quarter and paid $180.7 million in dividends, bringing total capital returned to $1.24 billion in the first half of fiscal 2026.
Following the strong results, management raised full-year fiscal 2026 guidance, now expecting revenue of $11.15–$11.22 billion and diluted EPS of $4.81–$4.88, reflecting sustained growth across its service portfolio and continued operational execution.
In total, we see an average annual earnings-per-share growth rate of 10% over the next five years for Cintas.
Competitive Advantages & Recession Performance
Cintas’s distinct operating advantage is its vast distribution network, which includes more than 11,000 local delivery routes.
It is the largest company in its industry, which gives it market control. It would be very difficult for a new competitor to enter the market and try to disrupt Cintas’ business model, even more so after the G&K purchase. This helps keep competition at bay as Cintas has a highly entrenched customer base. Its distribution capabilities and reputation for quality enable Cintas to achieve high margins.
While Cintas is a high-growth business, it is also reliant on a healthy global economy. When the economy goes into recession, companies hire fewer people and often reduce headcount. This reduces demand for the products Cintas manufactures. Cintas had a difficult time growing earnings-per-share during the Great Recession, despite the fact that the recession officially ended in 2010.
The company’s earnings-per-share for 2008-2010 are shown below:
2007 earnings-per-share of $2.09
2008 earnings-per-share of $2.15 (2.9% increase)
2009 earnings-per-share of $1.83 (15% decline)
2010 earnings-per-share of $1.49 (19% decline)
As you can see, Cintas struggled during 2009 and 2010, with two consecutive years of double-digit earnings declines. This reflects how closely the business’s profits are tied to the state of the economy.
At the same time, Cintas remained profitable, which allowed it to continue increasing dividends each year. The dividend also appears to be quite safe at current levels.
Valuation & Expected Returns
Based on expected earnings-per-share of $4.90 for fiscal 2026, Cintas stock trades for a price-to-earnings ratio of about 40.8x. This is a very high valuation against the broader market and Cintas’ own historical valuations. Our fair value estimate for Cintas stock is a P/E ratio of 38x.
Therefore, CTAS stock appears to be overvalued right now.
If the stock were to return to our fair value estimate, the price-to-earnings ratio would be about 1% lower over the next five years due to multiple valuation contractions.
As a result, Cintas is significantly overvalued. Earnings-per-share growth (expected at 10% annually) and the 0.9% dividend yield will offset the negative returns from a falling valuation multiple. But overall, total returns are estimated at just 9.9% per year over the next five years.
Cintas’ valuation today is high, and we believe investors should avoid the stock and wait for a price pullback.
Final Thoughts
Cintas is a very strong company with high earnings and dividend growth rates. However, Cintas appears to be trading at a rather elevated valuation, with shares holding up well against the overall market’s sell-off over the past year.
Another consequence of shares hitting new all-time highs continuously in recent years is that the stock has a low dividend yield below the average of the S&P 500 Index.
While the company has a secure dividend payout with room for future dividend increases, the stock is overvalued. We rate it a hold despite its superior fundamentals solely because of the elevated valuation.
Additionally, the following Sure Dividend databases contain the most reliable dividend growers in our investment universe:
If you’re looking for stocks with unique dividend characteristics, consider the following Sure Dividend databases:
The major domestic stock market indices are another solid resource for finding investment ideas. Sure Dividend compiles the following stock market databases and updates them monthly:
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