Cintas (CTAS) - Get Report is the nation's largest maker of uniforms, and about 5 million employees wear the company's clothing on the job every day. It's a name that many people recognize, yet it doesn't show up on a large number of investors' radar screens.

But the company has had positive revenue and earnings growth in each of the past 37 years, and investors should strongly consider doing "it" when it comes to Cintas.

At Tuesday's closing price of $36.54, the stock is down 14% year to date. Cintas is currently trading at 16.9 times expected fiscal 2007 (ending May) earnings of $2.16 a share, which is a discount to its historical average valuation. It's also worth noting that

Aramark

(RMK)

, Cintas's closest publicly traded competitor, was recently taken private for 20 times full-year earnings.

Cintas posted fiscal fourth-quarter results on July 13. Earnings grew 15% to 55 cents a share, which was a penny ahead of the consensus analyst estimate. Revenue improved 12% year over year to $908 million, although organic sales growth declined sequentially for a second straight quarter, to 6.7%.

That said, I believe those numbers are impressive for a company with $3.4 billion in annual revenue in an unglamorous line of business. During the quarter, Cintas' operating margin also improved 30 basis points from the year-ago period, despite a 40 basis-point increase in energy costs.

The company also has solid finances, with debt a manageable 23% of total capital. Cintas' corporate debt also receives an A-rating from the major agencies, as operating cash flow was 41% higher than reported net income over the past four quarters.

The company announced a $500 million share-repurchase program on July 26. At that point, management had already exhausted $496 million of an earlier $500 million buyback authorization, which was announced in May 2005. It's also worth noting that Cintas pays an annual dividend each March. The latest 35-cent payment indicates a 1% yield at current levels.

The company's expansion could be hampered by the recent interest rate hikes, although it's worth noting that management's streak of 37 consecutive years of annual sales growth has take place amid a wide variety of economic conditions.

The current consensus analyst estimates predict the company will post 11.4% earnings growth in fiscal 2007, on top of a similar result last year. These numbers are the highest growth that Cintas has delivered in five years, and I believe its valuation multiple will expand if management continues to deliver double-digit annual earnings growth.

I wouldn't go as far as saying the stock is recession-proof, but do I believe that Cintas will outperform the market over the coming quarters, whether we're headed for a soft or hard landing. The company offers both dividend and buyback support, and I think the shares could trade up through $40 by the end of the year.

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