If we took a straw poll, we’re fairly sure not many UK investors would be familiar with Mason, Ohio-based Cintas (CTAS:NASDAQ), which provides workwear, mops and cleaning products.

We’re also fairly sure not many people would know Cintas shares have outperformed five of the ‘Magnificent Seven’ over the last five years with a gain of 340% excluding reinvested dividends (for the record, Amazon (AMZN:NASDAQ) shares are up 115%, Microsoft (MSFT:NASDAQ) 183%, Alphabet (GOOG:NASDAQ) 213%, Apple (AAPL:NASDAQ) 272% and Meta Platforms (META:NASDAQ) 306%).

Founded during the Great Depression, the company rents out its products to over one million businesses in North America, and while it isn’t exactly glamorous, it generates an impressively resilient revenue stream.

We estimate the company has grown its EPS (earnings per share) by an average of 14% per year over the last 40 years, with remarkably little volatility.

However, the company believes it can continue growing and increasing its market share as there are a potential 16 million customers in North America, penetration rates are just 20% and most of its new business is with customers who weren’t previously in a rental programme.

The problem is, the business has become so successful the shares are now trading on a PE (price to earnings) ratio of over 46 times, and expectations are sky-high when it reports its third-quarter results for the three months to the end of February on 26 March.

As well as scrutinising the earnings, investors will be looking closely at the company’s guidance after it reduced its organic sales growth forecast for the year to May alongside half-year results in November.

With fears of an economic slowdown growing, what Cintas says about the outlook for this and the next financial year represent a huge test for the company and the share price.

US UPDATES OVER THE NEXT 7 DAYS

QUARTERLY RESULTS

21 March: Carnival Corp

25 March: Dollar Tree, McCormick&Co, Paychex

26 March: Cintas

27 March: Walgreens Boots

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