There are no safe havens in the stock market. Every stock carries risk. But some less than others. This column features stocks that have shown one or more of the following characteristics: less volatility, better earnings, larger market caps, safe and increasing dividends. In these times of turmoil, our goal is to show readers better opportunities for investing with fewer risks.

December 5, 2011 - Cintas Corporation (CTAS-NASDAQ) provides corporate identity uniforms and related business services in North America, Latin America, Europe, and Asia. The company operates in four segments: Rental Uniforms and Ancillary Products; Uniform Direct Sales; First Aid, Safety, and Fire Protection Services; and Document Management Services.

Uniform Direct Sales does direct sale of uniforms and related items, and branded promotional products. First Aid, Safety, and Fire Protection Services offers first aid, safety, and fire protection products and services.

Document Management Services provides document destruction, document imaging, and document retention services. The company sells through its distribution network and local delivery routes, or local representatives to small service and manufacturing companies, as well as corporations. Cintas Corporation was founded in 1968 and is based in Cincinnati, Ohio.

Nothing to get excited about here. That's exactly what should appeal to Conservative investors. There's no high tech, bio tech or nano tech to understand (or watch go up and down). Just the basics. A company that makes uniforms and derives most of its revenues (82% in 2011) from renting them. If you think employment is about to improve, as was the case in November, then CTAS will be a large beneficiary of it.

First quarter results were impressive with revenues up 10% and earnings jumped by 30% (fiscal year ends May 31). Increased prices for its rental services helped. On the negative side, and squeezing some margins, was higher costs for energy related expenses and cotton prices, a major material for most uniforms. Management softened the blows with better cost controls, operational efficiency and an emphasis on higher margined business. Because of these efforts, operating margin moved up by 170 basis points.

Management believes it will deliver those numbers, maybe more as it raised the dividend by 10%, taking it to 54 cents a year, up from 49 cents. It pays once a year in March. For the last 4 years, the payout was 46 cents, 47 cents, 48 cents and 49 cents respectively. The nickel bump this year gives an indication of management and the board's confidence. With earnings above $2.00, the dividend would take only 25%.

Some of the headwinds facing CTAS are the uncertainties of the global economy which in turn influences job growth. More jobs are needed for CTAS to see solid top line gains. Furthermore, adding new customers is harder if they're not adding employees. To finish off the challenges, cotton prices, while they're well below their highs, are volatile and if they spike as they did last year, they will affect margins and profitablity.

The stock price has been in a rather tight range over the last 2 years, trading between $23 and $34.54 a share. At the moment, it's closer to the upper end, but it seems it's almost waiting for more good news on employment to provide the spark needed to push it higher. However, if unemployment starts trending up again, there's little doubt the stock will have a hard time improving.

- Essential Numbers:
- Trailing P/E: 17.22
- Forward P/E: 13.5
- Price to sales ratio: 1.01
- Price to book value: 1.86
- Operating margin: 12.01%
- Profit margin: 6.52%
- Return on equity: 11.1%
- Return on assets: 7.31%
- Revenues for last 12 months: $3.90 billion
- Total cash: $277.04 million
- Cash per share: $2.14
- Total debt: $1.29 billion
- Total debt to equity: 61%
- Current ratio: 2.4
- Book value per share: $16.30
- Change in last 52 weeks: 8.01%
- Total shares outstanding: 129.72 million
- Float: 109.68 million
- Insiders own: 13.47%
- Institutions own: 74.7%

Cintas is one of those companies that supplies a basic necessity. There's nothing fancy here, no catalysts about to boost revenues and profits. Just a steady performer that will increase all its numbers once employment gains. When that is is the question. But if it's within 12 months, expect this stock to finally break out of its trading range.

- Company Web site: www.cintas.com