RENTOKIL INITIAL PLC-SP ADR (RTO) Stock Fundamental Analysis
NYSE:RTO - New York Stock Exchange, Inc. - US7601251041 - ADR - Currency: USD
Overall RTO gets a fundamental rating of 5 out of 10. We evaluated RTO against 83 industry peers in the Commercial Services & Supplies industry. While RTO has a great profitability rating, there are quite some concerns on its financial health. RTO has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year RTO was profitable.
RTO had a positive operating cash flow in the past year.
In the past 5 years RTO has always been profitable.
In the past 5 years RTO always reported a positive cash flow from operatings.
1.2 Ratios
RTO's Return On Assets of 2.91% is in line compared to the rest of the industry. RTO outperforms 59.04% of its industry peers.
RTO's Return On Equity of 7.26% is fine compared to the rest of the industry. RTO outperforms 61.45% of its industry peers.
The Return On Invested Capital of RTO (6.63%) is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for RTO is significantly below the industry average of 10.68%.
The last Return On Invested Capital (6.63%) for RTO is above the 3 year average (5.49%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.91% | ||
| ROE | 7.26% | ||
| ROIC | 6.63% |
ROA(3y)2.76%
ROA(5y)3.54%
ROE(3y)7.41%
ROE(5y)11.9%
ROIC(3y)5.49%
ROIC(5y)6.1%
1.3 Margins
With a decent Profit Margin value of 5.65%, RTO is doing good in the industry, outperforming 68.67% of the companies in the same industry.
In the last couple of years the Profit Margin of RTO has declined.
RTO's Operating Margin of 12.71% is amongst the best of the industry. RTO outperforms 80.72% of its industry peers.
In the last couple of years the Operating Margin of RTO has grown nicely.
RTO's Gross Margin of 83.87% is amongst the best of the industry. RTO outperforms 96.39% of its industry peers.
In the last couple of years the Gross Margin of RTO has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.71% | ||
| PM (TTM) | 5.65% | ||
| GM | 83.87% |
OM growth 3Y2.06%
OM growth 5Y4.21%
PM growth 3Y-14.07%
PM growth 5Y-11.59%
GM growth 3Y1.51%
GM growth 5Y1.16%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), RTO is destroying value.
Compared to 1 year ago, RTO has about the same amount of shares outstanding.
Compared to 5 years ago, RTO has more shares outstanding
Compared to 1 year ago, RTO has an improved debt to assets ratio.
2.2 Solvency
RTO has an Altman-Z score of 2.07. This is not the best score and indicates that RTO is in the grey zone with still only limited risk for bankruptcy at the moment.
RTO has a Altman-Z score (2.07) which is comparable to the rest of the industry.
RTO has a debt to FCF ratio of 8.87. This is a slightly negative value and a sign of low solvency as RTO would need 8.87 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 8.87, RTO is in line with its industry, outperforming 59.04% of the companies in the same industry.
RTO has a Debt/Equity ratio of 0.67. This is a neutral value indicating RTO is somewhat dependend on debt financing.
RTO has a Debt to Equity ratio (0.67) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | 8.87 | ||
| Altman-Z | 2.07 |
ROIC/WACC0.91
WACC7.25%
2.3 Liquidity
A Current Ratio of 0.81 indicates that RTO may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.81, RTO is doing worse than 84.34% of the companies in the same industry.
RTO has a Quick Ratio of 0.81. This is a bad value and indicates that RTO is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.72, RTO is doing worse than 84.34% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.81 | ||
| Quick Ratio | 0.72 |
3. Growth
3.1 Past
RTO shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -8.19%.
Measured over the past years, RTO shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.12% on average per year.
The Revenue has been growing slightly by 1.13% in the past year.
The Revenue has been growing by 14.90% on average over the past years. This is quite good.
EPS 1Y (TTM)-8.19%
EPS 3Y5.61%
EPS 5Y8.12%
EPS Q2Q%-17.82%
Revenue 1Y (TTM)1.13%
Revenue growth 3Y22.51%
Revenue growth 5Y14.9%
Sales Q2Q%0.96%
3.2 Future
The Earnings Per Share is expected to grow by 8.44% on average over the next years. This is quite good.
Based on estimates for the next years, RTO will show a small growth in Revenue. The Revenue will grow by 5.34% on average per year.
EPS Next Y5.54%
EPS Next 2Y7.57%
EPS Next 3Y8.44%
EPS Next 5YN/A
Revenue Next Year11.94%
Revenue Next 2Y8.01%
Revenue Next 3Y6.88%
Revenue Next 5Y5.34%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 16.46, which indicates a correct valuation of RTO.
Based on the Price/Earnings ratio, RTO is valued a bit cheaper than 71.08% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 25.25. RTO is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 15.64 indicates a correct valuation of RTO.
RTO's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. RTO is cheaper than 72.29% of the companies in the same industry.
RTO's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.46 | ||
| Fwd PE | 15.64 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, RTO is valued a bit cheaper than 68.67% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, RTO is valued a bit cheaper than 67.47% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.09 | ||
| EV/EBITDA | 10.29 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates RTO does not grow enough to justify the current Price/Earnings ratio.
RTO has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.97
PEG (5Y)2.03
EPS Next 2Y7.57%
EPS Next 3Y8.44%
5. Dividend
5.1 Amount
RTO has a Yearly Dividend Yield of 2.58%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.49, RTO pays a better dividend. On top of this RTO pays more dividend than 85.54% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.37, RTO has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.58% |
5.2 History
The dividend of RTO is nicely growing with an annual growth rate of 14.30%!
RTO has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of RTO decreased recently.
Dividend Growth(5Y)14.3%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
RTO pays out 74.59% of its income as dividend. This is not a sustainable payout ratio.
RTO's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP74.59%
EPS Next 2Y7.57%
EPS Next 3Y8.44%
23.37
0 (0%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners100.07%
Inst Owner ChangeN/A
Ins Owners0.61%
Ins Owner ChangeN/A
Market Cap11.74B
Analysts75.2
Price Target28.32 (21.18%)
Short Float %0.23%
Short Ratio1.04
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.58% |
Yearly Dividend0.61
Dividend Growth(5Y)14.3%
DP74.59%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)N/A
Avg Revenue beat(2)N/A
Min Revenue beat(2)N/A
Max Revenue beat(2)N/A
Revenue beat(4)N/A
Avg Revenue beat(4)N/A
Min Revenue beat(4)N/A
Max Revenue beat(4)N/A
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0.13%
PT rev (3m)-4.53%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)0%
EPS NY rev (3m)-2.61%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)7.91%
Revenue NY rev (3m)8.71%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.46 | ||
| Fwd PE | 15.64 | ||
| P/S | 1.63 | ||
| P/FCF | 19.09 | ||
| P/OCF | 13.03 | ||
| P/B | 2.09 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.29 |
EPS(TTM)1.42
EY6.08%
EPS(NY)1.49
Fwd EY6.39%
FCF(TTM)1.22
FCFY5.24%
OCF(TTM)1.79
OCFY7.67%
SpS14.38
BVpS11.18
TBVpS-7.61
PEG (NY)2.97
PEG (5Y)2.03
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.91% | ||
| ROE | 7.26% | ||
| ROCE | 8.66% | ||
| ROIC | 6.63% | ||
| ROICexc | 7.5% | ||
| ROICexgc | N/A | ||
| OM | 12.71% | ||
| PM (TTM) | 5.65% | ||
| GM | 83.87% | ||
| FCFM | 8.52% |
ROA(3y)2.76%
ROA(5y)3.54%
ROE(3y)7.41%
ROE(5y)11.9%
ROIC(3y)5.49%
ROIC(5y)6.1%
ROICexc(3y)6.5%
ROICexc(5y)8.24%
ROICexgc(3y)80.52%
ROICexgc(5y)79.55%
ROCE(3y)7.83%
ROCE(5y)9.4%
ROICexcg growth 3Y27.39%
ROICexcg growth 5Y21.27%
ROICexc growth 3Y-11.58%
ROICexc growth 5Y-6.54%
OM growth 3Y2.06%
OM growth 5Y4.21%
PM growth 3Y-14.07%
PM growth 5Y-11.59%
GM growth 3Y1.51%
GM growth 5Y1.16%
F-Score6
Asset Turnover0.52
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | 8.87 | ||
| Debt/EBITDA | 2.41 | ||
| Cap/Depr | 45.07% | ||
| Cap/Sales | 3.96% | ||
| Interest Coverage | 3.84 | ||
| Cash Conversion | 58.05% | ||
| Profit Quality | 150.81% | ||
| Current Ratio | 0.81 | ||
| Quick Ratio | 0.72 | ||
| Altman-Z | 2.07 |
F-Score6
WACC7.25%
ROIC/WACC0.91
Cap/Depr(3y)45.91%
Cap/Depr(5y)48.18%
Cap/Sales(3y)4.33%
Cap/Sales(5y)4.77%
Profit Quality(3y)155.2%
Profit Quality(5y)166.26%
High Growth Momentum
Growth
EPS 1Y (TTM)-8.19%
EPS 3Y5.61%
EPS 5Y8.12%
EPS Q2Q%-17.82%
EPS Next Y5.54%
EPS Next 2Y7.57%
EPS Next 3Y8.44%
EPS Next 5YN/A
Revenue 1Y (TTM)1.13%
Revenue growth 3Y22.51%
Revenue growth 5Y14.9%
Sales Q2Q%0.96%
Revenue Next Year11.94%
Revenue Next 2Y8.01%
Revenue Next 3Y6.88%
Revenue Next 5Y5.34%
EBIT growth 1Y1.17%
EBIT growth 3Y25.03%
EBIT growth 5Y19.74%
EBIT Next Year45.42%
EBIT Next 3Y17.95%
EBIT Next 5Y13.05%
FCF growth 1Y-11.98%
FCF growth 3Y4.71%
FCF growth 5Y9.66%
OCF growth 1Y-8.01%
OCF growth 3Y6.38%
OCF growth 5Y7.93%