RENTOKIL INITIAL PLC-SP ADR (RTO) Stock Fundamental Analysis
USA - NYSE:RTO - US7601251041 - ADR
24.65 USD
-0.13 (-0.52%)
24.65 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.
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
The Return On Assets of RTO (2.35%) is comparable to the rest of the industry.
With a Return On Equity value of 6.35%, RTO perfoms like the industry average, outperforming 55.95% 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 10.60%.
| 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
Looking at the Profit Margin, with a value of 4.80%, RTO is in the better half of the industry, outperforming 63.10% of the companies in the same industry.
RTO's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 10.17%, RTO is in the better half of the industry, outperforming 70.24% of the companies in the same industry.
RTO's Operating Margin has improved in the last couple of years.
RTO's Gross Margin of 86.39% is amongst the best of 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
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.
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 2.03. 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.
Looking at the Altman-Z score, with a value of 2.03, RTO is in line with its industry, outperforming 48.81% of the companies in the same 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 60.71% of its industry peers.
A Debt/Equity ratio of 1.00 indicates that RTO is somewhat dependend on debt financing.
RTO's Debt to Equity ratio of 1.00 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 | ||
|---|---|---|---|
| Debt/Equity | 1 | ||
| Debt/FCF | 8.79 | ||
| Altman-Z | 2.03 |
ROIC/WACC0.64
WACC7.3%
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.
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 has a Quick ratio of 1.03. This is in the lower half of the industry: RTO underperforms 67.86% of its industry peers.
| 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.
The Revenue has grown by 16.73% in the past year. This is quite good.
RTO shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 21.47% yearly.
EPS 1Y (TTM)-17.69%
EPS 3Y5.61%
EPS 5Y8.12%
EPS Q2Q%-17.55%
Revenue 1Y (TTM)16.73%
Revenue growth 3Y34.4%
Revenue growth 5Y21.47%
Sales Q2Q%-4.12%
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 9.28% yearly.
Based on estimates for the next years, RTO will show a quite strong growth in Revenue. The Revenue will grow by 9.97% on average per year.
EPS Next Y7.43%
EPS Next 2Y8.28%
EPS Next 3Y9.28%
EPS Next 5YN/A
Revenue Next Year9.79%
Revenue Next 2Y6.44%
Revenue Next 3Y5.96%
Revenue Next 5Y9.97%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
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 25.41, which means the current valuation is very expensive for RTO.
RTO's Price/Earnings ratio is a bit cheaper when compared to the industry. RTO is cheaper than 63.10% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.41. RTO is around the same levels.
RTO is valuated rather expensively with a Price/Forward Earnings ratio of 19.67.
67.86% of the companies in the same industry are more expensive than RTO, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of RTO to the average of the S&P500 Index (22.88), we can say RTO is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.41 | ||
| Fwd PE | 19.67 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, RTO is valued a bit cheaper than the industry average as 61.90% of the companies are valued more expensively.
76.19% 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 | 18.09 | ||
| EV/EBITDA | 12.11 |
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)3.42
PEG (5Y)3.13
EPS Next 2Y8.28%
EPS Next 3Y9.28%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.40%, RTO has a reasonable but not impressive dividend return.
RTO's Dividend Yield is rather good when compared to the industry average which is at 2.27. 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 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.4% |
5.2 History
On average, the dividend of RTO grows each year by 20.84%, which is quite nice.
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
RTO pays out 93.97% of its income as dividend. 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%
24.65
-0.13 (-0.52%)
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 Cap12.40B
Analysts72.5
Price Target29.5 (19.68%)
Short Float %0.7%
Short Ratio4.31
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.4% |
Yearly Dividend0.12
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)6.79%
PT rev (3m)5.65%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)1.79%
EPS NY rev (3m)2.11%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)-3.35%
Revenue NY rev (3m)-1.92%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.41 | ||
| Fwd PE | 19.67 | ||
| P/S | 1.78 | ||
| P/FCF | 18.09 | ||
| P/OCF | 12.75 | ||
| P/B | 2.35 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.11 |
EPS(TTM)0.97
EY3.94%
EPS(NY)1.25
Fwd EY5.08%
FCF(TTM)1.36
FCFY5.53%
OCF(TTM)1.93
OCFY7.84%
SpS13.86
BVpS10.48
TBVpS-7.33
PEG (NY)3.42
PEG (5Y)3.13
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 | 2.03 |
F-Score5
WACC7.3%
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 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%-4.12%
Revenue Next Year9.79%
Revenue Next 2Y6.44%
Revenue Next 3Y5.96%
Revenue Next 5Y9.97%
EBIT growth 1Y1.84%
EBIT growth 3Y37.17%
EBIT growth 5Y26.59%
EBIT Next Year55.17%
EBIT Next 3Y21.26%
EBIT Next 5Y19.12%
FCF growth 1Y48.35%
FCF growth 3Y14.88%
FCF growth 5Y15.93%
OCF growth 1Y44.92%
OCF growth 3Y16.71%
OCF growth 5Y14.1%