RENTOKIL INITIAL PLC-SP ADR (RTO) Stock Fundamental Analysis
NYSE:RTO - New York Stock Exchange, Inc. - US7601251041 - ADR - Currency: USD
RTO gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 84 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.
Each year in the past 5 years RTO has been profitable.
RTO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
RTO's Return On Assets of 2.91% is fine compared to the rest of the industry. RTO outperforms 63.10% of its industry peers.
With a decent Return On Equity value of 7.26%, RTO is doing good in the industry, outperforming 64.29% of the companies in the same industry.
With a Return On Invested Capital value of 6.63%, RTO perfoms like the industry average, outperforming 58.33% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for RTO is significantly below the industry average of 11.59%.
The 3 year average ROIC (5.49%) for RTO is below the current ROIC(6.63%), indicating increased profibility in the last year.
| 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
Looking at the Profit Margin, with a value of 5.65%, RTO is in the better half of the industry, outperforming 67.86% of the companies in the same industry.
In the last couple of years the Profit Margin of RTO has declined.
RTO has a Operating Margin of 12.71%. This is in the better half of the industry: RTO outperforms 77.38% of its industry peers.
RTO's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 83.87%, RTO belongs to the best of the industry, outperforming 97.62% 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 | 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
RTO has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it 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
An Altman-Z score of 2.07 indicates that RTO is not a great score, but indicates only limited risk for bankruptcy at the moment.
RTO's Altman-Z score of 2.07 is in line compared to the rest of the industry. RTO outperforms 48.81% of its industry peers.
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.
RTO has a Debt to FCF ratio of 8.87. This is comparable to the rest of the industry: RTO outperforms 59.52% of its industry peers.
RTO has a Debt/Equity ratio of 0.67. This is a neutral value indicating RTO is somewhat dependend on debt financing.
RTO's Debt to Equity ratio of 0.67 is in line compared to the rest of the industry. RTO outperforms 45.24% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | 8.87 | ||
| Altman-Z | 2.07 |
ROIC/WACC0.88
WACC7.54%
2.3 Liquidity
RTO has a Current 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.
RTO has a Current ratio of 0.81. This is amonst the worse of the industry: RTO underperforms 80.95% of its industry peers.
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 80.95% 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 -5.46%.
RTO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.12% yearly.
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)-5.46%
EPS 3Y5.61%
EPS 5Y8.12%
EPS Q2Q%6.98%
Revenue 1Y (TTM)1.13%
Revenue growth 3Y22.51%
Revenue growth 5Y14.9%
Sales Q2Q%24.32%
3.2 Future
RTO is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.44% yearly.
RTO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.87% yearly.
EPS Next Y5.54%
EPS Next 2Y7.57%
EPS Next 3Y8.44%
EPS Next 5YN/A
Revenue Next Year13.6%
Revenue Next 2Y8.27%
Revenue Next 3Y6.89%
Revenue Next 5Y3.87%
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
With a Price/Earnings ratio of 16.08, RTO is valued correctly.
RTO's Price/Earnings ratio is a bit cheaper when compared to the industry. RTO is cheaper than 71.43% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.03, RTO is valued a bit cheaper.
The Price/Forward Earnings ratio is 14.45, which indicates a correct valuation of RTO.
Compared to the rest of the industry, the Price/Forward Earnings ratio of RTO indicates a somewhat cheap valuation: RTO is cheaper than 76.19% of the companies listed in the same industry.
RTO is valuated cheaply when we compare the Price/Forward Earnings ratio to 36.28, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.08 | ||
| Fwd PE | 14.45 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, RTO is valued a bit cheaper than 65.48% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, RTO is valued a bit cheaper than 70.24% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.33 | ||
| EV/EBITDA | 10.29 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
RTO has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.9
PEG (5Y)1.98
EPS Next 2Y7.57%
EPS Next 3Y8.44%
5. Dividend
5.1 Amount
RTO has a Yearly Dividend Yield of 2.51%.
RTO's Dividend Yield is rather good when compared to the industry average which is at 2.51. RTO pays more dividend than 85.71% of the companies in the same industry.
RTO's Dividend Yield is comparable with the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.51% |
5.2 History
The dividend of RTO is nicely growing with an annual growth rate of 14.30%!
RTO has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)14.3%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
74.59% 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.
DP74.59%
EPS Next 2Y7.57%
EPS Next 3Y8.44%
23.64
+0.3 (+1.29%)
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 Cap11.89B
Analysts72.5
Price Target28.1 (18.87%)
Short Float %0.42%
Short Ratio3.19
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.51% |
Yearly Dividend0.61
Dividend Growth(5Y)14.3%
DP74.59%
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)-2.09%
PT rev (3m)-0.77%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)0%
EPS NY rev (3m)-0.12%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)1.48%
Revenue NY rev (3m)6.93%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.08 | ||
| Fwd PE | 14.45 | ||
| P/S | 1.65 | ||
| P/FCF | 19.33 | ||
| P/OCF | 13.2 | ||
| P/B | 2.12 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.29 |
EPS(TTM)1.47
EY6.22%
EPS(NY)1.64
Fwd EY6.92%
FCF(TTM)1.22
FCFY5.17%
OCF(TTM)1.79
OCFY7.58%
SpS14.36
BVpS11.17
TBVpS-7.61
PEG (NY)2.9
PEG (5Y)1.98
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
WACC7.54%
ROIC/WACC0.88
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 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%24.32%
Revenue Next Year13.6%
Revenue Next 2Y8.27%
Revenue Next 3Y6.89%
Revenue Next 5Y3.87%
EBIT growth 1Y1.17%
EBIT growth 3Y25.03%
EBIT growth 5Y19.74%
EBIT Next Year55.17%
EBIT Next 3Y21.26%
EBIT Next 5Y12.96%
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%