ROLLINS INC (ROL) Stock Fundamental Analysis
NYSE:ROL - New York Stock Exchange, Inc. - US7757111049 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to ROL. ROL was compared to 83 industry peers in the Commercial Services & Supplies industry. ROL gets an excellent profitability rating and is at the same time showing great financial health properties. ROL is valied quite expensively at the moment, while it does show a decent growth rate. This makes ROL very considerable for quality investing!
1. Profitability
1.1 Basic Checks
ROL had positive earnings in the past year.
In the past year ROL had a positive cash flow from operations.
In the past 5 years ROL has always been profitable.
In the past 5 years ROL always reported a positive cash flow from operatings.
1.2 Ratios
ROL has a Return On Assets of 15.39%. This is amongst the best in the industry. ROL outperforms 95.18% of its industry peers.
With an excellent Return On Equity value of 33.89%, ROL belongs to the best of the industry, outperforming 92.77% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 20.65%, ROL belongs to the top of the industry, outperforming 93.98% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ROL is significantly above the industry average of 11.64%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.39% | ||
| ROE | 33.89% | ||
| ROIC | 20.65% |
ROA(3y)16.89%
ROA(5y)16.49%
ROE(3y)33.93%
ROE(5y)32.31%
ROIC(3y)22.15%
ROIC(5y)21.52%
1.3 Margins
The Profit Margin of ROL (13.70%) is better than 87.95% of its industry peers.
ROL's Profit Margin has improved in the last couple of years.
ROL has a Operating Margin of 19.14%. This is amongst the best in the industry. ROL outperforms 89.16% of its industry peers.
In the last couple of years the Operating Margin of ROL has grown nicely.
ROL has a better Gross Margin (52.69%) than 91.57% of its industry peers.
ROL's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.14% | ||
| PM (TTM) | 13.7% | ||
| GM | 52.69% |
OM growth 3Y1.65%
OM growth 5Y4.25%
PM growth 3Y-2.19%
PM growth 5Y6.41%
GM growth 3Y0.41%
GM growth 5Y0.77%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), ROL is creating value.
Compared to 1 year ago, ROL has about the same amount of shares outstanding.
Compared to 5 years ago, ROL has less shares outstanding
The debt/assets ratio for ROL has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 11.69 indicates that ROL is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 11.69, ROL belongs to the top of the industry, outperforming 93.98% of the companies in the same industry.
ROL has a debt to FCF ratio of 0.86. This is a very positive value and a sign of high solvency as it would only need 0.86 years to pay back of all of its debts.
The Debt to FCF ratio of ROL (0.86) is better than 84.34% of its industry peers.
A Debt/Equity ratio of 0.38 indicates that ROL is not too dependend on debt financing.
With a decent Debt to Equity ratio value of 0.38, ROL is doing good in the industry, outperforming 62.65% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.38 | ||
| Debt/FCF | 0.86 | ||
| Altman-Z | 11.69 |
ROIC/WACC2.29
WACC9%
2.3 Liquidity
ROL has a Current Ratio of 0.68. This is a bad value and indicates that ROL is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of ROL (0.68) is worse than 85.54% of its industry peers.
A Quick Ratio of 0.63 indicates that ROL may have some problems paying its short term obligations.
ROL has a Quick ratio of 0.63. This is amonst the worse of the industry: ROL underperforms 87.95% of its industry peers.
The current and quick ratio evaluation for ROL is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.68 | ||
| Quick Ratio | 0.63 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 8.33% over the past year.
ROL shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.58% yearly.
ROL shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.38%.
Measured over the past years, ROL shows a quite strong growth in Revenue. The Revenue has been growing by 10.95% on average per year.
EPS 1Y (TTM)8.33%
EPS 3Y13.9%
EPS 5Y15.58%
EPS Q2Q%11.11%
Revenue 1Y (TTM)10.38%
Revenue growth 3Y11.81%
Revenue growth 5Y10.95%
Sales Q2Q%12.06%
3.2 Future
Based on estimates for the next years, ROL will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.30% on average per year.
Based on estimates for the next years, ROL will show a quite strong growth in Revenue. The Revenue will grow by 8.70% on average per year.
EPS Next Y13.43%
EPS Next 2Y12.78%
EPS Next 3Y12.45%
EPS Next 5Y10.3%
Revenue Next Year11.61%
Revenue Next 2Y10.13%
Revenue Next 3Y9.53%
Revenue Next 5Y8.7%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 55.12 indicates a quite expensive valuation of ROL.
The rest of the industry has a similar Price/Earnings ratio as ROL.
When comparing the Price/Earnings ratio of ROL to the average of the S&P500 Index (27.91), we can say ROL is valued expensively.
The Price/Forward Earnings ratio is 45.52, which means the current valuation is very expensive for ROL.
The rest of the industry has a similar Price/Forward Earnings ratio as ROL.
The average S&P500 Price/Forward Earnings ratio is at 37.11. ROL is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 55.12 | ||
| Fwd PE | 45.52 |
4.2 Price Multiples
65.06% of the companies in the same industry are cheaper than ROL, based on the Enterprise Value to EBITDA ratio.
ROL's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 43.99 | ||
| EV/EBITDA | 35.03 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ROL does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of ROL may justify a higher PE ratio.
ROL's earnings are expected to grow with 12.45% in the coming years. This may justify a more expensive valuation.
PEG (NY)4.1
PEG (5Y)3.54
EPS Next 2Y12.78%
EPS Next 3Y12.45%
5. Dividend
5.1 Amount
ROL has a Yearly Dividend Yield of 1.14%. Purely for dividend investing, there may be better candidates out there.
ROL's Dividend Yield is a higher than the industry average which is at 2.37.
Compared to an average S&P500 Dividend Yield of 2.32, ROL's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.14% |
5.2 History
On average, the dividend of ROL grows each year by 14.46%, which is quite nice.
ROL has been paying a dividend for at least 10 years, so it has a reliable track record.
ROL has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)14.46%
Div Incr Years22
Div Non Decr Years25
5.3 Sustainability
ROL pays out 63.80% of its income as dividend. This is not a sustainable payout ratio.
ROL's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP63.8%
EPS Next 2Y12.78%
EPS Next 3Y12.45%
57.32
+0.06 (+0.1%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners53.71%
Inst Owner Change-0.06%
Ins Owners4.73%
Ins Owner Change-0.01%
Market Cap27.78B
Analysts75.29
Price Target58.43 (1.94%)
Short Float %2.46%
Short Ratio3.91
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.14% |
Yearly Dividend0.62
Dividend Growth(5Y)14.46%
DP63.8%
Div Incr Years22
Div Non Decr Years25
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.74%
Min EPS beat(2)-1.71%
Max EPS beat(2)0.23%
EPS beat(4)1
Avg EPS beat(4)-2%
Min EPS beat(4)-4.7%
Max EPS beat(4)0.23%
EPS beat(8)3
Avg EPS beat(8)0.21%
EPS beat(12)6
Avg EPS beat(12)0.86%
EPS beat(16)7
Avg EPS beat(16)-0.07%
Revenue beat(2)1
Avg Revenue beat(2)-0.11%
Min Revenue beat(2)-0.28%
Max Revenue beat(2)0.06%
Revenue beat(4)2
Avg Revenue beat(4)0.03%
Min Revenue beat(4)-0.43%
Max Revenue beat(4)0.77%
Revenue beat(8)4
Avg Revenue beat(8)-0.12%
Revenue beat(12)7
Avg Revenue beat(12)0.19%
Revenue beat(16)10
Avg Revenue beat(16)0.51%
PT rev (1m)2.82%
PT rev (3m)10.3%
EPS NQ rev (1m)-0.45%
EPS NQ rev (3m)-0.63%
EPS NY rev (1m)-0.03%
EPS NY rev (3m)-0.1%
Revenue NQ rev (1m)-0.04%
Revenue NQ rev (3m)1.21%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)0.91%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 55.12 | ||
| Fwd PE | 45.52 | ||
| P/S | 7.78 | ||
| P/FCF | 43.99 | ||
| P/OCF | 42.28 | ||
| P/B | 19.24 | ||
| P/tB | N/A | ||
| EV/EBITDA | 35.03 |
EPS(TTM)1.04
EY1.81%
EPS(NY)1.26
Fwd EY2.2%
FCF(TTM)1.3
FCFY2.27%
OCF(TTM)1.36
OCFY2.37%
SpS7.37
BVpS2.98
TBVpS-1.02
PEG (NY)4.1
PEG (5Y)3.54
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.39% | ||
| ROE | 33.89% | ||
| ROCE | 28.57% | ||
| ROIC | 20.65% | ||
| ROICexc | 21.74% | ||
| ROICexgc | 129.83% | ||
| OM | 19.14% | ||
| PM (TTM) | 13.7% | ||
| GM | 52.69% | ||
| FCFM | 17.69% |
ROA(3y)16.89%
ROA(5y)16.49%
ROE(3y)33.93%
ROE(5y)32.31%
ROIC(3y)22.15%
ROIC(5y)21.52%
ROICexc(3y)23.33%
ROICexc(5y)22.85%
ROICexgc(3y)136.66%
ROICexgc(5y)139.1%
ROCE(3y)29.89%
ROCE(5y)29.05%
ROICexcg growth 3Y-6.03%
ROICexcg growth 5Y8.73%
ROICexc growth 3Y0.12%
ROICexc growth 5Y4.25%
OM growth 3Y1.65%
OM growth 5Y4.25%
PM growth 3Y-2.19%
PM growth 5Y6.41%
GM growth 3Y0.41%
GM growth 5Y0.77%
F-Score6
Asset Turnover1.12
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.38 | ||
| Debt/FCF | 0.86 | ||
| Debt/EBITDA | 0.68 | ||
| Cap/Depr | 21.45% | ||
| Cap/Sales | 0.72% | ||
| Interest Coverage | 33.81 | ||
| Cash Conversion | 81.88% | ||
| Profit Quality | 129.07% | ||
| Current Ratio | 0.68 | ||
| Quick Ratio | 0.63 | ||
| Altman-Z | 11.69 |
F-Score6
WACC9%
ROIC/WACC2.29
Cap/Depr(3y)30.15%
Cap/Depr(5y)29.05%
Cap/Sales(3y)1%
Cap/Sales(5y)1.04%
Profit Quality(3y)118.83%
Profit Quality(5y)123.95%
High Growth Momentum
Growth
EPS 1Y (TTM)8.33%
EPS 3Y13.9%
EPS 5Y15.58%
EPS Q2Q%11.11%
EPS Next Y13.43%
EPS Next 2Y12.78%
EPS Next 3Y12.45%
EPS Next 5Y10.3%
Revenue 1Y (TTM)10.38%
Revenue growth 3Y11.81%
Revenue growth 5Y10.95%
Sales Q2Q%12.06%
Revenue Next Year11.61%
Revenue Next 2Y10.13%
Revenue Next 3Y9.53%
Revenue Next 5Y8.7%
EBIT growth 1Y7.42%
EBIT growth 3Y13.66%
EBIT growth 5Y15.67%
EBIT Next Year27.72%
EBIT Next 3Y16.13%
EBIT Next 5Y12.82%
FCF growth 1Y34.33%
FCF growth 3Y15.69%
FCF growth 5Y15.51%
OCF growth 1Y31.61%
OCF growth 3Y14.78%
OCF growth 5Y14.47%