RENTOKIL INITIAL PLC-SP ADR (RTO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:RTO - US7601251041 - ADR
32.39 USD
-1.06 (-3.17%)
32.39 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to RTO. RTO was compared to 80 industry peers in the Commercial Services & Supplies industry. There are concerns on the financial health of RTO while its profitability can be described as average. RTO has a decent growth rate and is not valued too expensively.
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 (2.35%) which is in line with its industry peers.
- RTO has a Return On Equity (6.35%) which is comparable to the rest of the 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 10.58%.
| 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 65.00% of its industry peers.
- RTO's Profit Margin has declined in the last couple of years.
- The Operating Margin of RTO (10.17%) is better than 68.75% of its industry peers.
- RTO's Operating Margin has improved in the last couple of years.
- RTO has a better Gross Margin (86.40%) than 98.75% 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 | 86.4% |
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.
- Compared to 5 years ago, RTO has more shares outstanding
- Compared to 1 year ago, RTO has an improved debt to assets ratio.
2.2 Solvency
- RTO has an Altman-Z score of 2.29. 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.
- RTO has a Altman-Z score (2.29) which is in line with its industry peers.
- The Debt to FCF ratio of RTO is 8.79, which is on the high side as it means it would take RTO, 8.79 years of fcf income to pay off all of its debts.
- RTO's Debt to FCF ratio of 8.79 is fine compared to the rest of the industry. RTO outperforms 63.75% of its industry peers.
- A Debt/Equity ratio of 1.00 indicates that RTO is somewhat dependend on debt financing.
- The Debt to Equity ratio of RTO (1.00) is worse than 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1 | ||
| Debt/FCF | 8.79 | ||
| Altman-Z | 2.29 |
ROIC/WACC0.6
WACC7.71%
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.
- RTO has a worse Current ratio (1.12) than 70.00% of its industry peers.
- A Quick Ratio of 1.03 indicates that RTO should not have too much problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 1.03, RTO is doing worse than 66.25% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.12 | ||
| Quick Ratio | 1.03 |
3. Growth
3.1 Past
- RTO shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -15.45%.
- The Earnings Per Share has been growing by 8.17% on average over the past years. This is quite good.
- The Revenue has grown by 16.75% 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 21.48% yearly.
EPS 1Y (TTM)-15.45%
EPS 3Y3.04%
EPS 5Y8.17%
EPS Q2Q%-15.51%
Revenue 1Y (TTM)16.75%
Revenue growth 3Y34.42%
Revenue growth 5Y21.48%
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 3.43% yearly.
- Based on estimates for the next years, RTO will show a small growth in Revenue. The Revenue will grow by 5.57% on average per year.
EPS Next Y11.5%
EPS Next 2Y10.86%
EPS Next 3Y10.96%
EPS Next 5Y3.43%
Revenue Next Year13.41%
Revenue Next 2Y8.21%
Revenue Next 3Y6.99%
Revenue Next 5Y5.57%
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 decreasing.
- 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
- RTO is valuated quite expensively with a Price/Earnings ratio of 25.91.
- Based on the Price/Earnings ratio, RTO is valued a bit cheaper than 61.25% of the companies in the same industry.
- RTO's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 28.60.
- Based on the Price/Forward Earnings ratio of 19.36, the valuation of RTO can be described as rather expensive.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of RTO indicates a somewhat cheap valuation: RTO is cheaper than 73.75% of the companies listed in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.83, RTO is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.91 | ||
| Fwd PE | 19.36 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of RTO is on the same level as its industry peers.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of RTO indicates a somewhat cheap valuation: RTO is cheaper than 70.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.76 | ||
| EV/EBITDA | 15.04 |
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)2.25
PEG (5Y)3.17
EPS Next 2Y10.86%
EPS Next 3Y10.96%
5. Dividend
5.1 Amount
- RTO has a Yearly Dividend Yield of 1.88%.
- Compared to an average industry Dividend Yield of 0.82, RTO pays a better dividend. On top of this RTO pays more dividend than 86.25% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, RTO has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.88% |
5.2 History
- The dividend of RTO is nicely growing with an annual growth rate of 20.86%!
- RTO has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)20.86%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- RTO pays out 93.98% 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.
DP93.98%
EPS Next 2Y10.86%
EPS Next 3Y10.96%
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.
Can you provide the valuation status for RENTOKIL INITIAL PLC-SP ADR?
ChartMill assigns a valuation rating of 4 / 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.
What are the PE and PB ratios of RENTOKIL INITIAL PLC-SP ADR (RTO) stock?
The Price/Earnings (PE) ratio for RENTOKIL INITIAL PLC-SP ADR (RTO) is 25.91 and the Price/Book (PB) ratio is 3.09.
What is the financial health of RENTOKIL INITIAL PLC-SP ADR (RTO) stock?
The financial health rating of RENTOKIL INITIAL PLC-SP ADR (RTO) is 3 / 10.