RENTOKIL INITIAL PLC-SP ADR (RTO) Stock Fundamental Analysis
NYSE:RTO - US7601251041 - ADR
24.02 USD
+0.12 (+0.5%)
24.02 USD
0 (0%)
Taking everything into account, RTO scores 5 out of 10 in our fundamental rating. RTO was compared to 84 industry peers in the Commercial Services & Supplies industry. RTO has a medium profitability rating, but doesn't score so well on its financial health evaluation. RTO has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year RTO was profitable.
In the past year RTO had a positive cash flow from operations.
RTO had positive earnings in each of the past 5 years.
Each year in the past 5 years RTO had a positive operating cash flow.
1.2 Ratios
RTO has a Return On Assets of 2.35%. This is comparable to the rest of the industry: RTO outperforms 59.52% of its industry peers.
The Return On Equity of RTO (6.35%) is comparable to the rest of the industry.
RTO's Return On Invested Capital of 4.66% is in line compared to the rest of the industry. RTO outperforms 51.19% of its industry peers.
The Average Return On Invested Capital over the past 3 years for RTO is significantly below the industry average of 10.78%.
| 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
RTO has a better Profit Margin (4.80%) than 64.29% of its industry peers.
In the last couple of years the Profit Margin of RTO has declined.
RTO has a Operating Margin of 10.17%. This is in the better half of the industry: RTO outperforms 71.43% of its industry peers.
RTO's Operating Margin has improved in the last couple of years.
RTO has a Gross Margin of 86.39%. This is amongst the best in the industry. RTO outperforms 98.81% of its industry peers.
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 | 86.39% |
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.
RTO has about the same amout of shares outstanding than it did 1 year ago.
RTO has more shares outstanding than it did 5 years ago.
RTO has a better debt/assets ratio than last year.
2.2 Solvency
RTO has an Altman-Z score of 1.79. This is a bad value and indicates that RTO is not financially healthy and even has some risk of bankruptcy.
RTO has a Altman-Z score of 1.79. This is comparable to the rest of the industry: RTO outperforms 41.67% of its industry peers.
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 better Debt to FCF ratio (8.79) than 61.90% of its industry peers.
RTO has a Debt/Equity ratio of 1.00. This is a neutral value indicating RTO is somewhat dependend on debt financing.
RTO has a worse Debt to Equity ratio (1.00) than 63.10% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1 | ||
| Debt/FCF | 8.79 | ||
| Altman-Z | 1.79 |
ROIC/WACC0.64
WACC7.26%
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.
Looking at the Current ratio, with a value of 1.12, RTO is doing worse than 71.43% of the companies in the same industry.
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.
RTO's Quick ratio of 1.03 is on the low side compared to the rest of the industry. RTO is outperformed by 64.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.12 | ||
| Quick Ratio | 1.03 |
3. Growth
3.1 Past
RTO shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -5.46%.
The Earnings Per Share has been growing by 8.12% on average over the past years. This is quite good.
Looking at the last year, RTO shows a quite strong growth in Revenue. The Revenue has grown by 16.73% in the last year.
Measured over the past years, RTO shows a very strong growth in Revenue. The Revenue has been growing by 21.47% on average per year.
EPS 1Y (TTM)-5.46%
EPS 3Y5.61%
EPS 5Y8.12%
EPS Q2Q%6.98%
Revenue 1Y (TTM)16.73%
Revenue growth 3Y34.4%
Revenue growth 5Y21.47%
Sales Q2Q%24.32%
3.2 Future
The Earnings Per Share is expected to grow by 9.28% 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 3.46% on average per year.
EPS Next Y7.43%
EPS Next 2Y8.28%
EPS Next 3Y9.28%
EPS Next 5YN/A
Revenue Next Year10.13%
Revenue Next 2Y6.41%
Revenue Next 3Y5.94%
Revenue Next 5Y3.46%
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.
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
Based on the Price/Earnings ratio of 16.01, the valuation of RTO can be described as correct.
77.38% of the companies in the same industry are more expensive than RTO, based on the Price/Earnings ratio.
RTO's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.08.
With a Price/Forward Earnings ratio of 14.19, RTO is valued correctly.
RTO's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. RTO is cheaper than 76.19% 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 22.67.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.01 | ||
| Fwd PE | 14.19 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of RTO indicates a somewhat cheap valuation: RTO is cheaper than 69.05% of the companies listed in the same industry.
77.38% of the companies in the same industry are more expensive than RTO, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.05 | ||
| EV/EBITDA | 9.47 |
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.
The decent profitability rating of RTO may justify a higher PE ratio.
PEG (NY)2.15
PEG (5Y)1.97
EPS Next 2Y8.28%
EPS Next 3Y9.28%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.49%, RTO has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.36, RTO pays a better dividend. On top of this RTO pays more dividend than 85.71% of the companies listed in the same industry.
RTO's Dividend Yield is comparable with the S&P500 average which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.49% |
5.2 History
The dividend of RTO is nicely growing with an annual growth rate of 20.84%!
RTO has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)20.84%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
93.97% of the earnings are spent on dividend by RTO. This is not a sustainable payout ratio.
The dividend of RTO is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP93.97%
EPS Next 2Y8.28%
EPS Next 3Y9.28%
24.02
+0.12 (+0.5%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners95.16%
Inst Owner ChangeN/A
Ins Owners0.62%
Ins Owner ChangeN/A
Market Cap12.08B
Analysts72.5
Price Target28.65 (19.28%)
Short Float %0.45%
Short Ratio2.82
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.49% |
Yearly Dividend0.81
Dividend Growth(5Y)20.84%
DP93.97%
Div Incr Years0
Div Non Decr Years0
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)1.97%
PT rev (3m)1.18%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)2.24%
EPS NY rev (3m)2.11%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)-1.61%
Revenue NY rev (3m)-1.61%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.01 | ||
| Fwd PE | 14.19 | ||
| P/S | 1.28 | ||
| P/FCF | 13.05 | ||
| P/OCF | 9.2 | ||
| P/B | 1.7 | ||
| P/tB | N/A | ||
| EV/EBITDA | 9.47 |
EPS(TTM)1.5
EY6.24%
EPS(NY)1.69
Fwd EY7.05%
FCF(TTM)1.84
FCFY7.66%
OCF(TTM)2.61
OCFY10.87%
SpS18.72
BVpS14.15
TBVpS-9.91
PEG (NY)2.15
PEG (5Y)1.97
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.35% | ||
| ROE | 6.35% | ||
| ROCE | 6.46% | ||
| ROIC | 4.66% | ||
| ROICexc | 5.45% | ||
| ROICexgc | 54.52% | ||
| OM | 10.17% | ||
| PM (TTM) | 4.8% | ||
| GM | 86.39% | ||
| FCFM | 9.83% |
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)6.28%
ROICexc(5y)8.1%
ROICexgc(3y)57.37%
ROICexgc(5y)65.66%
ROCE(3y)7.83%
ROCE(5y)9.4%
ROICexcg growth 3Y14.18%
ROICexcg growth 5Y13.56%
ROICexc growth 3Y-12.31%
ROICexc growth 5Y-7.01%
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-Score5
Asset Turnover0.49
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1 | ||
| Debt/FCF | 8.79 | ||
| Debt/EBITDA | 3.96 | ||
| Cap/Depr | 46.51% | ||
| Cap/Sales | 4.12% | ||
| Interest Coverage | 2.63 | ||
| Cash Conversion | 73.34% | ||
| Profit Quality | 204.85% | ||
| Current Ratio | 1.12 | ||
| Quick Ratio | 1.03 | ||
| Altman-Z | 1.79 |
F-Score5
WACC7.26%
ROIC/WACC0.64
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)-5.46%
EPS 3Y5.61%
EPS 5Y8.12%
EPS Q2Q%6.98%
EPS Next Y7.43%
EPS Next 2Y8.28%
EPS Next 3Y9.28%
EPS Next 5YN/A
Revenue 1Y (TTM)16.73%
Revenue growth 3Y34.4%
Revenue growth 5Y21.47%
Sales Q2Q%24.32%
Revenue Next Year10.13%
Revenue Next 2Y6.41%
Revenue Next 3Y5.94%
Revenue Next 5Y3.46%
EBIT growth 1Y1.84%
EBIT growth 3Y37.17%
EBIT growth 5Y26.59%
EBIT Next Year55.17%
EBIT Next 3Y21.26%
EBIT Next 5Y12.07%
FCF growth 1Y48.35%
FCF growth 3Y14.88%
FCF growth 5Y15.93%
OCF growth 1Y44.92%
OCF growth 3Y16.71%
OCF growth 5Y14.1%