RENTOKIL INITIAL PLC-SP ADR (RTO) Stock Fundamental Analysis
USA - NYSE:RTO - US7601251041 - ADR
27.53 USD
+0.96 (+3.61%)
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. While RTO is still in line with the averages on profitability rating, there are concerns on its financial health. RTO is not valued too expensively and it also shows a decent growth rate.
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
RTO has a Return On Assets of 2.38%. This is comparable to the rest of the industry: RTO outperforms 59.52% of its industry peers.
With a Return On Equity value of 6.44%, RTO perfoms like the industry average, outperforming 59.52% of the companies in the same industry.
RTO's Return On Invested Capital of 4.74% is in line compared to the rest of the industry. RTO outperforms 51.19% of its industry peers.
RTO had an Average Return On Invested Capital over the past 3 years of 5.49%. This is below the industry average of 10.21%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.38% | ||
| ROE | 6.44% | ||
| ROIC | 4.74% |
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 (4.79%) than 64.29% of its industry peers.
In the last couple of years the Profit Margin of RTO has declined.
RTO has a better Operating Margin (10.17%) than 71.43% of its industry peers.
RTO's Operating Margin has improved in the last couple of years.
RTO's Gross Margin of 87.69% is amongst the best of the industry. RTO outperforms 98.81% 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 | 10.17% | ||
| PM (TTM) | 4.79% | ||
| GM | 87.69% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so 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 2.10. 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 (2.10) is comparable to the rest of the industry.
RTO has a debt to FCF ratio of 8.55. This is a slightly negative value and a sign of low solvency as RTO would need 8.55 years to pay back of all of its debts.
RTO has a better Debt to FCF ratio (8.55) 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.
Looking at the Debt to Equity ratio, with a value of 1.00, RTO is doing worse than 63.10% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1 | ||
| Debt/FCF | 8.55 | ||
| Altman-Z | 2.1 |
ROIC/WACC0.64
WACC7.38%
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 72.62% of the companies in the same industry.
A Quick Ratio of 1.03 indicates that RTO should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.03, RTO is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.12 | ||
| Quick Ratio | 1.03 |
3. Growth
3.1 Past
The earnings per share for RTO have decreased strongly by -17.69% in the last year.
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 18.65% in the last year.
Measured over the past years, RTO shows a very strong growth in Revenue. The Revenue has been growing by 22.23% on average per year.
EPS 1Y (TTM)-17.69%
EPS 3Y5.61%
EPS 5Y8.12%
EPS Q2Q%-17.55%
Revenue 1Y (TTM)18.65%
Revenue growth 3Y35.81%
Revenue growth 5Y22.23%
Sales Q2Q%-4.12%
3.2 Future
Based on estimates for the next years, RTO will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.79% on average per year.
RTO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.48% yearly.
EPS Next Y5.18%
EPS Next 2Y7.34%
EPS Next 3Y8.56%
EPS Next 5Y8.79%
Revenue Next Year6.36%
Revenue Next 2Y4.7%
Revenue Next 3Y4.71%
Revenue Next 5Y9.48%
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
The Price/Earnings ratio is 28.68, which means the current valuation is very expensive for RTO.
RTO's Price/Earnings ratio is in line with the industry average.
RTO's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.90.
With a Price/Forward Earnings ratio of 22.40, RTO is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of RTO indicates a somewhat cheap valuation: RTO is cheaper than 63.10% of the companies listed in the same industry.
RTO is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 23.36, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.68 | ||
| Fwd PE | 22.4 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, RTO is valued a bit cheaper than 60.71% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, RTO is valued a bit cheaper than 76.19% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.64 | ||
| EV/EBITDA | 12.54 |
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)5.54
PEG (5Y)3.53
EPS Next 2Y7.34%
EPS Next 3Y8.56%
5. Dividend
5.1 Amount
RTO has a Yearly Dividend Yield of 2.33%. 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 2.34. RTO pays more dividend than 86.90% of the companies in the same industry.
RTO's Dividend Yield is comparable with the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.33% |
5.2 History
On average, the dividend of RTO grows each year by 21.59%, which is quite nice.
RTO has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)21.59%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
95.51% 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.
DP95.51%
EPS Next 2Y7.34%
EPS Next 3Y8.56%
NYSE:RTO (10/7/2025, 1:24:54 PM)
27.53
+0.96 (+3.61%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners74.38%
Inst Owner ChangeN/A
Ins Owners0.59%
Ins Owner ChangeN/A
Market Cap13.85B
Analysts71.2
Price Target28.02 (1.78%)
Short Float %0.79%
Short Ratio4.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.33% |
Yearly Dividend0.12
Dividend Growth(5Y)21.59%
DP95.51%
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)-2.19%
PT rev (3m)-2.34%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)-2.33%
EPS NY rev (3m)-0.15%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)-3.42%
Revenue NY rev (3m)-4.98%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.68 | ||
| Fwd PE | 22.4 | ||
| P/S | 1.95 | ||
| P/FCF | 19.64 | ||
| P/OCF | 13.83 | ||
| P/B | 2.63 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.54 |
EPS(TTM)0.96
EY3.49%
EPS(NY)1.23
Fwd EY4.46%
FCF(TTM)1.4
FCFY5.09%
OCF(TTM)1.99
OCFY7.23%
SpS14.08
BVpS10.48
TBVpS-7.33
PEG (NY)5.54
PEG (5Y)3.53
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.38% | ||
| ROE | 6.44% | ||
| ROCE | 6.57% | ||
| ROIC | 4.74% | ||
| ROICexc | 5.54% | ||
| ROICexgc | 55.42% | ||
| OM | 10.17% | ||
| PM (TTM) | 4.79% | ||
| GM | 87.69% | ||
| FCFM | 9.95% |
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)6.26%
ROICexc(5y)8.09%
ROICexgc(3y)55.82%
ROICexgc(5y)64.73%
ROCE(3y)7.83%
ROCE(5y)9.4%
ROICexcg growth 3Y13.17%
ROICexcg growth 5Y12.96%
ROICexc growth 3Y-12.38%
ROICexc growth 5Y-7.05%
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 Turnover0.5
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1 | ||
| Debt/FCF | 8.55 | ||
| Debt/EBITDA | 3.86 | ||
| Cap/Depr | 46.46% | ||
| Cap/Sales | 4.18% | ||
| Interest Coverage | 2.6 | ||
| Cash Conversion | 73.73% | ||
| Profit Quality | 207.77% | ||
| Current Ratio | 1.12 | ||
| Quick Ratio | 1.03 | ||
| Altman-Z | 2.1 |
F-Score5
WACC7.38%
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)-17.69%
EPS 3Y5.61%
EPS 5Y8.12%
EPS Q2Q%-17.55%
EPS Next Y5.18%
EPS Next 2Y7.34%
EPS Next 3Y8.56%
EPS Next 5Y8.79%
Revenue 1Y (TTM)18.65%
Revenue growth 3Y35.81%
Revenue growth 5Y22.23%
Sales Q2Q%-4.12%
Revenue Next Year6.36%
Revenue Next 2Y4.7%
Revenue Next 3Y4.71%
Revenue Next 5Y9.48%
EBIT growth 1Y3.51%
EBIT growth 3Y38.61%
EBIT growth 5Y27.38%
EBIT Next Year45.65%
EBIT Next 3Y18.76%
EBIT Next 5Y16.89%
FCF growth 1Y52.56%
FCF growth 3Y16.08%
FCF growth 5Y16.66%
OCF growth 1Y49.17%
OCF growth 3Y17.93%
OCF growth 5Y14.82%