RENTOKIL INITIAL PLC-SP ADR (RTO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:RTO - US7601251041 - ADR
32.94 USD
+0.18 (+0.55%)
32.97 USD
+0.03 (+0.09%)
RTO gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 80 industry peers in the Commercial Services & Supplies industry. While RTO is still in line with the averages on profitability rating, there are concerns on its financial health. RTO has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
- RTO had positive earnings in the past year.
- RTO had a positive operating cash flow in the past year.
- In the past 5 years RTO has always been profitable.
- Each year in the past 5 years RTO had a positive operating cash flow.
1.2 Ratios
- The Return On Assets of RTO (2.35%) is comparable to the rest of the industry.
- Looking at the Return On Equity, with a value of 6.35%, RTO is in line with its industry, outperforming 58.75% of the companies in the same industry.
- RTO has a Return On Invested Capital (4.66%) which 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 10.58%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.35% | ||
| ROE | 6.35% | ||
| ROIC | 4.66% |
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
- The Profit Margin of RTO (4.80%) is better than 65.00% of its industry peers.
- In the last couple of years the Profit Margin of RTO has declined.
- Looking at the Operating Margin, with a value of 10.17%, RTO is in the better half of the industry, outperforming 68.75% of the companies in the same industry.
- RTO's Operating Margin has improved in the last couple of years.
- With an excellent Gross Margin value of 86.40%, RTO belongs to the best of the industry, outperforming 98.75% of the companies in the same industry.
- RTO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.17% | ||
| PM (TTM) | 4.8% | ||
| GM | 86.4% |
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
- RTO has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- The number of shares outstanding for RTO remains at a similar level compared to 1 year ago.
- The number of shares outstanding for RTO has been increased compared to 5 years ago.
- The debt/assets ratio for RTO has been reduced compared to a year ago.
2.2 Solvency
- RTO has an Altman-Z score of 2.31. 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.
- The Altman-Z score of RTO (2.31) is comparable to the rest of the industry.
- RTO has a debt to FCF ratio of 8.79. This is a slightly negative value and a sign of low solvency as RTO would need 8.79 years to pay back of all of its debts.
- RTO has a Debt to FCF ratio of 8.79. This is in the better half of the industry: RTO outperforms 63.75% of its industry peers.
- A Debt/Equity ratio of 1.00 indicates that RTO is somewhat dependend on debt financing.
- RTO has a worse Debt to Equity ratio (1.00) than 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1 | ||
| Debt/FCF | 8.79 | ||
| Altman-Z | 2.31 |
ROIC/WACC0.6
WACC7.73%
2.3 Liquidity
- RTO has a Current Ratio of 1.12. This is a normal value and indicates that RTO is financially healthy and should not expect problems in meeting its short term obligations.
- The Current ratio of RTO (1.12) is worse than 70.00% of its industry peers.
- RTO has a Quick Ratio of 1.03. This is a normal value and indicates that RTO is financially healthy and should not expect problems in meeting its short term obligations.
- Looking at the Quick ratio, with a value of 1.03, RTO is doing worse than 66.25% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.12 | ||
| Quick Ratio | 1.03 |
3. Growth
3.1 Past
- RTO shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -15.45%.
- Measured over the past years, RTO shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.17% on average per year.
- The Revenue has grown by 16.75% in the past year. This is quite good.
- The Revenue has been growing by 21.48% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)-15.45%
EPS 3Y3.04%
EPS 5Y8.17%
EPS Q2Q%-15.51%
Revenue 1Y (TTM)16.75%
Revenue growth 3Y34.42%
Revenue growth 5Y21.48%
Sales Q2Q%24.28%
3.2 Future
- RTO is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 3.43% yearly.
- Based on estimates for the next years, RTO will show a small growth in Revenue. The Revenue will grow by 5.57% on average per year.
EPS Next Y11.5%
EPS Next 2Y10.86%
EPS Next 3Y10.96%
EPS Next 5Y3.43%
Revenue Next Year13.41%
Revenue Next 2Y8.21%
Revenue Next 3Y6.99%
Revenue Next 5Y5.57%
3.3 Evolution
- The EPS growth rate is decreasing: in the next years the growth will be less 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
- A Price/Earnings ratio of 26.35 indicates a quite expensive valuation of RTO.
- Based on the Price/Earnings ratio, RTO is valued a bit cheaper than 62.50% of the companies in the same industry.
- RTO's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.21.
- RTO is valuated rather expensively with a Price/Forward Earnings ratio of 19.69.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of RTO indicates a somewhat cheap valuation: RTO is cheaper than 75.00% of the companies listed in the same industry.
- RTO's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.98.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.35 | ||
| Fwd PE | 19.69 |
4.2 Price Multiples
- RTO's Enterprise Value to EBITDA is on the same level as the industry average.
- RTO's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. RTO is cheaper than 70.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.16 | ||
| EV/EBITDA | 15.25 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The decent profitability rating of RTO may justify a higher PE ratio.
PEG (NY)2.29
PEG (5Y)3.22
EPS Next 2Y10.86%
EPS Next 3Y10.96%
5. Dividend
5.1 Amount
- RTO has a Yearly Dividend Yield of 1.88%. Purely for dividend investing, there may be better candidates out there.
- RTO's Dividend Yield is rather good when compared to the industry average which is at 0.82. RTO pays more dividend than 86.25% of the companies in the same industry.
- RTO's Dividend Yield is comparable with the S&P500 average which is at 1.81.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.88% |
5.2 History
- The dividend of RTO is nicely growing with an annual growth rate of 20.86%!
- RTO has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)20.86%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- 93.98% of the earnings are spent on dividend by RTO. This is not a sustainable payout ratio.
- RTO's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP93.98%
EPS Next 2Y10.86%
EPS Next 3Y10.96%
RENTOKIL INITIAL PLC-SP ADR / RTO FAQ
Can you provide the ChartMill fundamental rating for RENTOKIL INITIAL PLC-SP ADR?
ChartMill assigns a fundamental rating of 5 / 10 to RTO.
Can you provide the valuation status for RENTOKIL INITIAL PLC-SP ADR?
ChartMill assigns a valuation rating of 4 / 10 to RENTOKIL INITIAL PLC-SP ADR (RTO). This can be considered as Fairly Valued.
Can you provide the profitability details for RENTOKIL INITIAL PLC-SP ADR?
RENTOKIL INITIAL PLC-SP ADR (RTO) has a profitability rating of 6 / 10.
What are the PE and PB ratios of RENTOKIL INITIAL PLC-SP ADR (RTO) stock?
The Price/Earnings (PE) ratio for RENTOKIL INITIAL PLC-SP ADR (RTO) is 26.35 and the Price/Book (PB) ratio is 3.14.
What is the financial health of RENTOKIL INITIAL PLC-SP ADR (RTO) stock?
The financial health rating of RENTOKIL INITIAL PLC-SP ADR (RTO) is 3 / 10.