Using the FINVIZ.com stock screener, I selected for S&P 500 stocks with a price/earnings ratio below 20 and insider ownership at or greater than ten percent. I will analyze based upon key fundamentals but with particular emphasis on return on equity and net earnings per employee as compared to 5 competing companies with a substantially lower percentage of insider ownership. I am interested in learning if any correlations exist in terms of performance in these two areas. Although these 5 companies represent a small sample of the overall S&P population of companies, any significant difference in performance between these companies and their competitors may warrant further study of insider ownership’s impact.
Cintas Corporation (CTAS) is a mid cap in the services sector, trading at about $30.43, which is 17.03 times trailing twelve month earnings. The price/earnings growth ratio is 1.47 and price to book is 1.80. The company’s return on equity is 11.10%. Year-over-year quarterly revenue growth is 10.10%, and the year-over-year earnings growth is 12.00%. Cintas’s debt/equity ratio is 60.80 and the current ratio is 2.40. The firm employees 30,000 full time equivalents and each contributes $8,416 to net income. Cintas Corporation is 13.47% insider owned.
Rival, G & K Services Inc. (GKSR) is a small cap trading at about $29.75, which is 17 times trailing twelve month earnings. The price/earnings growth ratio is 1.65 and price to book is 1.04. The company’s return on equity is 6.54%. Year-over-year quarterly revenue growth is 4.70% and the year-over-year earnings growth is -7.60%. G & K’s debt/equity ratio is 27.16 and the current ratio is 1.98. To continue reading, click here.