RENTOKIL INITIAL PLC-SP ADR (RTO) Stock Fundamental Analysis
NYSE:RTO - New York Stock Exchange, Inc. - US7601251041 - ADR - Currency: USD
Overall RTO gets a fundamental rating of 5 out of 10. We evaluated RTO 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 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.
RTO had positive earnings in each of the past 5 years.
RTO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
RTO has a better Return On Assets (3.49%) than 64.63% of its industry peers.
Looking at the Return On Equity, with a value of 9.41%, RTO is in the better half of the industry, outperforming 68.29% of the companies in the same industry.
The Return On Invested Capital of RTO (6.32%) is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for RTO is below the industry average of 10.12%.
The last Return On Invested Capital (6.32%) for RTO is above the 3 year average (6.24%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.49% | ||
| ROE | 9.41% | ||
| ROIC | 6.32% |
ROA(3y)3.82%
ROA(5y)4.63%
ROE(3y)11.93%
ROE(5y)16.12%
ROIC(3y)6.24%
ROIC(5y)6.7%
1.3 Margins
The Profit Margin of RTO (7.25%) is better than 78.05% of its industry peers.
RTO's Profit Margin has improved in the last couple of years.
RTO has a better Operating Margin (12.92%) than 76.83% of its industry peers.
RTO's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 82.72%, RTO belongs to the best of the industry, outperforming 96.34% of the companies in the same industry.
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 | 12.92% | ||
| PM (TTM) | 7.25% | ||
| GM | 82.72% |
OM growth 3Y8.21%
OM growth 5Y5.02%
PM growth 3Y2.25%
PM growth 5YN/A
GM growth 3Y1.68%
GM growth 5Y0.98%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so RTO is destroying value.
Compared to 1 year ago, RTO has about the same amount of shares outstanding.
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 2.07. 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 2.07, RTO is in line with its industry, outperforming 50.00% of the companies in the same industry.
The Debt to FCF ratio of RTO is 9.54, which is on the high side as it means it would take RTO, 9.54 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of RTO (9.54) is comparable to the rest of the industry.
RTO has a Debt/Equity ratio of 0.82. This is a neutral value indicating RTO is somewhat dependend on debt financing.
RTO's Debt to Equity ratio of 0.82 is in line compared to the rest of the industry. RTO outperforms 40.24% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.82 | ||
| Debt/FCF | 9.54 | ||
| Altman-Z | 2.07 |
ROIC/WACC0.9
WACC7.02%
2.3 Liquidity
A Current Ratio of 1.04 indicates that RTO should not have too much problems paying its short term obligations.
RTO's Current ratio of 1.04 is on the low side compared to the rest of the industry. RTO is outperformed by 74.39% of its industry peers.
A Quick Ratio of 0.96 indicates that RTO may have some problems paying its short term obligations.
The Quick ratio of RTO (0.96) is worse than 69.51% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.04 | ||
| Quick Ratio | 0.96 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 0.56% over the past year.
Measured over the past years, RTO shows a quite strong growth in Earnings Per Share. The EPS has been growing by 12.22% on average per year.
Looking at the last year, RTO shows a quite strong growth in Revenue. The Revenue has grown by 12.41% in the last year.
Measured over the past years, RTO shows a quite strong growth in Revenue. The Revenue has been growing by 16.80% on average per year.
EPS 1Y (TTM)0.56%
EPS 3Y14.71%
EPS 5Y12.22%
EPS Q2Q%1.67%
Revenue 1Y (TTM)12.41%
Revenue growth 3Y24.23%
Revenue growth 5Y16.8%
Sales Q2Q%1.31%
3.2 Future
RTO is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.56% yearly.
Based on estimates for the next years, RTO will show a small growth in Revenue. The Revenue will grow by 7.42% on average per year.
EPS Next Y-6.38%
EPS Next 2Y-0.55%
EPS Next 3Y3.15%
EPS Next 5Y4.56%
Revenue Next Year1.18%
Revenue Next 2Y2.36%
Revenue Next 3Y2.85%
Revenue Next 5Y7.42%
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.
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
RTO is valuated rather expensively with a Price/Earnings ratio of 17.14.
Based on the Price/Earnings ratio, RTO is valued a bit cheaper than the industry average as 71.95% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 29.63. RTO is valued slightly cheaper when compared to this.
RTO is valuated rather expensively with a Price/Forward Earnings ratio of 17.45.
Compared to the rest of the industry, the Price/Forward Earnings ratio of RTO indicates a somewhat cheap valuation: RTO is cheaper than 70.73% of the companies listed in the same industry.
RTO's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.68.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.14 | ||
| Fwd PE | 17.45 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as RTO.
RTO's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. RTO is cheaper than 65.85% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.24 | ||
| EV/EBITDA | 11.25 |
4.3 Compensation for Growth
The decent profitability rating of RTO may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.4
EPS Next 2Y-0.55%
EPS Next 3Y3.15%
5. Dividend
5.1 Amount
RTO has a Yearly Dividend Yield of 2.24%.
Compared to an average industry Dividend Yield of 2.13, RTO pays a better dividend. On top of this RTO pays more dividend than 85.37% of the companies listed in the same industry.
RTO's Dividend Yield is comparable with the S&P500 average which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.24% |
5.2 History
On average, the dividend of RTO grows each year by 14.61%, which is quite nice.
RTO has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of RTO decreased recently.
Dividend Growth(5Y)14.61%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
55.87% of the earnings are spent on dividend by RTO. This is a bit on the high side, but may be sustainable.
The dividend of RTO is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP55.87%
EPS Next 2Y-0.55%
EPS Next 3Y3.15%
25.37
-0.81 (-3.09%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners100.07%
Inst Owner ChangeN/A
Ins Owners0.61%
Ins Owner ChangeN/A
Market Cap12.74B
Analysts74.62
Price Target29.66 (16.91%)
Short Float %0.62%
Short Ratio5.39
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.24% |
Yearly Dividend0.08
Dividend Growth(5Y)14.61%
DP55.87%
Div Incr Years1
Div Non Decr Years1
Ex-DateN/A
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)-0.88%
PT rev (3m)1.17%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)-0.01%
EPS NY rev (3m)-0.01%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.14 | ||
| Fwd PE | 17.45 | ||
| P/S | 1.86 | ||
| P/FCF | 20.24 | ||
| P/OCF | 14.15 | ||
| P/B | 2.42 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.25 |
EPS(TTM)1.48
EY5.83%
EPS(NY)1.45
Fwd EY5.73%
FCF(TTM)1.25
FCFY4.94%
OCF(TTM)1.79
OCFY7.06%
SpS13.62
BVpS10.48
TBVpS-7.46
PEG (NY)N/A
PEG (5Y)1.4
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.49% | ||
| ROE | 9.41% | ||
| ROCE | 8.12% | ||
| ROIC | 6.32% | ||
| ROICexc | 7.72% | ||
| ROICexgc | N/A | ||
| OM | 12.92% | ||
| PM (TTM) | 7.25% | ||
| GM | 82.72% | ||
| FCFM | 9.21% |
ROA(3y)3.82%
ROA(5y)4.63%
ROE(3y)11.93%
ROE(5y)16.12%
ROIC(3y)6.24%
ROIC(5y)6.7%
ROICexc(3y)7.71%
ROICexc(5y)8.97%
ROICexgc(3y)62.44%
ROICexgc(5y)66.91%
ROCE(3y)9.01%
ROCE(5y)9.95%
ROICexcg growth 3Y-5.31%
ROICexcg growth 5Y-1.52%
ROICexc growth 3Y-12.09%
ROICexc growth 5Y-9%
OM growth 3Y8.21%
OM growth 5Y5.02%
PM growth 3Y2.25%
PM growth 5YN/A
GM growth 3Y1.68%
GM growth 5Y0.98%
F-Score7
Asset Turnover0.48
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.82 | ||
| Debt/FCF | 9.54 | ||
| Debt/EBITDA | 2.9 | ||
| Cap/Depr | 44.49% | ||
| Cap/Sales | 3.96% | ||
| Interest Coverage | 3.62 | ||
| Cash Conversion | 60.34% | ||
| Profit Quality | 127.04% | ||
| Current Ratio | 1.04 | ||
| Quick Ratio | 0.96 | ||
| Altman-Z | 2.07 |
F-Score7
WACC7.02%
ROIC/WACC0.9
Cap/Depr(3y)48.88%
Cap/Depr(5y)50.38%
Cap/Sales(3y)4.82%
Cap/Sales(5y)5.24%
Profit Quality(3y)156%
Profit Quality(5y)156.68%
High Growth Momentum
Growth
EPS 1Y (TTM)0.56%
EPS 3Y14.71%
EPS 5Y12.22%
EPS Q2Q%1.67%
EPS Next Y-6.38%
EPS Next 2Y-0.55%
EPS Next 3Y3.15%
EPS Next 5Y4.56%
Revenue 1Y (TTM)12.41%
Revenue growth 3Y24.23%
Revenue growth 5Y16.8%
Sales Q2Q%1.31%
Revenue Next Year1.18%
Revenue Next 2Y2.36%
Revenue Next 3Y2.85%
Revenue Next 5Y7.42%
EBIT growth 1Y-4.04%
EBIT growth 3Y34.43%
EBIT growth 5Y22.67%
EBIT Next Year34.83%
EBIT Next 3Y15.57%
EBIT Next 5Y16.9%
FCF growth 1Y55.09%
FCF growth 3Y10.02%
FCF growth 5Y22.14%
OCF growth 1Y44.57%
OCF growth 3Y10.38%
OCF growth 5Y15.18%