RENTOKIL INITIAL PLC-SP ADR (RTO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:RTO - US7601251041 - ADR
26.96 USD
+0.96 (+3.69%)
26.96 USD
0 (0%)
Taking everything into account, RTO scores 5 out of 10 in our fundamental rating. RTO was compared to 82 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.
In the past year RTO had a positive cash flow from operations.
In the past 5 years RTO has always 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 (2.36%) is comparable to the rest of the industry.
RTO has a Return On Equity of 6.38%. This is comparable to the rest of the industry: RTO outperforms 54.88% of its industry peers.
Looking at the Return On Invested Capital, with a value of 4.69%, RTO is in line with its industry, outperforming 52.44% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for RTO is below the industry average of 10.48%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.36% | ||
| ROE | 6.38% | ||
| ROIC | 4.69% |
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 62.20% of its industry peers.
In the last couple of years the Profit Margin of RTO has declined.
The Operating Margin of RTO (10.17%) is better than 71.95% of its industry peers.
RTO's Operating Margin has improved in the last couple of years.
RTO has a Gross Margin of 86.86%. This is amongst the best in the industry. RTO outperforms 98.78% 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) | 4.8% | ||
| GM | 86.86% |
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.
Compared to 1 year ago, RTO has about the same amount of shares outstanding.
RTO has more shares outstanding than it did 5 years ago.
The debt/assets ratio for RTO has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.08 indicates that RTO is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.08, RTO perfoms like the industry average, outperforming 48.78% of the companies in the same industry.
The Debt to FCF ratio of RTO is 8.70, which is on the high side as it means it would take RTO, 8.70 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of RTO (8.70) is comparable to the rest of the industry.
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 62.20% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1 | ||
| Debt/FCF | 8.7 | ||
| Altman-Z | 2.08 |
ROIC/WACC0.63
WACC7.46%
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.
With a Current ratio value of 1.12, RTO is not doing good in the industry: 70.73% of the companies in the same industry are doing better.
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 64.63% 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 has been growing slightly by 6.45% over the past year.
RTO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.83% yearly.
RTO shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 17.42%.
Measured over the past years, RTO shows a very strong growth in Revenue. The Revenue has been growing by 21.74% on average per year.
EPS 1Y (TTM)6.45%
EPS 3Y10.05%
EPS 5Y10.83%
EPS Q2Q%6.87%
Revenue 1Y (TTM)17.42%
Revenue growth 3Y34.91%
Revenue growth 5Y21.74%
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 5.96% yearly.
RTO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.66% yearly.
EPS Next Y26.65%
EPS Next 2Y18.25%
EPS Next 3Y15.78%
EPS Next 5Y5.96%
Revenue Next Year11.71%
Revenue Next 2Y7.38%
Revenue Next 3Y6.47%
Revenue Next 5Y4.66%
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 21.57 indicates a rather expensive valuation of RTO.
Compared to the rest of the industry, the Price/Earnings ratio of RTO is on the same level as its industry peers.
RTO is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 25.45, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 15.98, which indicates a correct valuation of RTO.
Based on the Price/Forward Earnings ratio, RTO is valued a bit cheaper than 74.39% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 34.46, RTO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.57 | ||
| Fwd PE | 15.98 |
4.2 Price Multiples
RTO's Enterprise Value to EBITDA is on the same level as the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of RTO indicates a somewhat cheap valuation: RTO is cheaper than 74.39% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.58 | ||
| EV/EBITDA | 12.51 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
RTO has a very decent profitability rating, which may justify a higher PE ratio.
RTO's earnings are expected to grow with 15.78% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.81
PEG (5Y)1.99
EPS Next 2Y18.25%
EPS Next 3Y15.78%
5. Dividend
5.1 Amount
RTO has a Yearly Dividend Yield of 2.25%. 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 2.59. RTO pays more dividend than 84.15% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, RTO has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.25% |
5.2 History
The dividend of RTO is nicely growing with an annual growth rate of 21.12%!
RTO has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)21.12%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
RTO pays out 94.52% 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.
DP94.52%
EPS Next 2Y18.25%
EPS Next 3Y15.78%
26.96
+0.96 (+3.69%)
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 Cap13.56B
Revenue(TTM)7.01B
Net Income(TTM)336.24M
Analysts76.8
Price Target30.23 (12.13%)
Short Float %0.7%
Short Ratio4.72
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.25% |
Yearly Dividend0.12
Dividend Growth(5Y)21.12%
DP94.52%
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)7.25%
PT rev (3m)8.81%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)36.23%
EPS NY rev (3m)35.44%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)32.66%
Revenue NY rev (3m)24.21%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.57 | ||
| Fwd PE | 15.98 | ||
| P/S | 1.93 | ||
| P/FCF | 19.58 | ||
| P/OCF | 13.8 | ||
| P/B | 2.57 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.51 |
EPS(TTM)1.25
EY4.64%
EPS(NY)1.69
Fwd EY6.26%
FCF(TTM)1.38
FCFY5.11%
OCF(TTM)1.95
OCFY7.25%
SpS13.94
BVpS10.48
TBVpS-7.33
PEG (NY)0.81
PEG (5Y)1.99
Graham Number17.17
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.36% | ||
| ROE | 6.38% | ||
| ROCE | 6.5% | ||
| ROIC | 4.69% | ||
| ROICexc | 5.48% | ||
| ROICexgc | 54.84% | ||
| OM | 10.17% | ||
| PM (TTM) | 4.8% | ||
| GM | 86.86% | ||
| FCFM | 9.88% |
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)56.79%
ROICexgc(5y)65.31%
ROCE(3y)7.83%
ROCE(5y)9.4%
ROICexgc growth 3Y13.81%
ROICexgc growth 5Y13.34%
ROICexc growth 3Y-12.34%
ROICexc growth 5Y-7.02%
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 | 8.7 | ||
| Debt/EBITDA | 3.92 | ||
| Cap/Depr | 46.49% | ||
| Cap/Sales | 4.14% | ||
| Interest Coverage | 2.62 | ||
| Cash Conversion | 73.49% | ||
| Profit Quality | 205.91% | ||
| Current Ratio | 1.12 | ||
| Quick Ratio | 1.03 | ||
| Altman-Z | 2.08 |
F-Score5
WACC7.46%
ROIC/WACC0.63
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)6.45%
EPS 3Y10.05%
EPS 5Y10.83%
EPS Q2Q%6.87%
EPS Next Y26.65%
EPS Next 2Y18.25%
EPS Next 3Y15.78%
EPS Next 5Y5.96%
Revenue 1Y (TTM)17.42%
Revenue growth 3Y34.91%
Revenue growth 5Y21.74%
Sales Q2Q%24.28%
Revenue Next Year11.71%
Revenue Next 2Y7.38%
Revenue Next 3Y6.47%
Revenue Next 5Y4.66%
EBIT growth 1Y2.43%
EBIT growth 3Y37.69%
EBIT growth 5Y26.87%
EBIT Next Year45.65%
EBIT Next 3Y18.76%
EBIT Next 5Y16.7%
FCF growth 1Y49.86%
FCF growth 3Y15.31%
FCF growth 5Y16.19%
OCF growth 1Y46.44%
OCF growth 3Y17.15%
OCF growth 5Y14.36%
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.
What is the valuation status of RENTOKIL INITIAL PLC-SP ADR (RTO) stock?
ChartMill assigns a valuation rating of 5 / 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.
Can you provide the PE and PB ratios for RTO stock?
The Price/Earnings (PE) ratio for RENTOKIL INITIAL PLC-SP ADR (RTO) is 21.57 and the Price/Book (PB) ratio is 2.57.
Can you provide the dividend sustainability for RTO stock?
The dividend rating of RENTOKIL INITIAL PLC-SP ADR (RTO) is 4 / 10 and the dividend payout ratio is 94.52%.