RENTOKIL INITIAL PLC-SP ADR (RTO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:RTO - US7601251041 - ADR
32.81 USD
-0.13 (-0.39%)
32.81 USD
0 (0%)
Overall RTO gets a fundamental rating of 5 out of 10. We evaluated RTO against 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.
- In the past 5 years RTO always reported a positive cash flow from operatings.
1.2 Ratios
- RTO's Return On Assets of 2.35% is in line compared to the rest of the industry. RTO outperforms 58.75% of its industry peers.
- With a Return On Equity value of 6.35%, RTO perfoms like the industry average, outperforming 58.75% of the companies in the same industry.
- Looking at the Return On Invested Capital, with a value of 4.66%, RTO is in line with its industry, outperforming 53.75% of the companies in the same industry.
- RTO had an Average Return On Invested Capital over the past 3 years of 5.49%. This 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
- With a decent Profit Margin value of 4.80%, RTO is doing good in the industry, outperforming 65.00% of the companies in the same industry.
- In the last couple of years the Profit Margin of RTO has declined.
- RTO's Operating Margin of 10.17% is fine compared to the rest of the industry. RTO outperforms 68.75% of its industry peers.
- RTO's Operating Margin has improved in the last couple of years.
- RTO's Gross Margin of 86.40% is amongst the best of the industry. RTO outperforms 98.75% 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 | 86.4% |
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.
- 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.
- RTO has a better debt/assets ratio than last year.
2.2 Solvency
- RTO has an Altman-Z score of 2.30. 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.
- The Altman-Z score of RTO (2.30) is comparable to the rest of the industry.
- 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.
- The Debt to FCF ratio of RTO (8.79) is better than 63.75% of its industry peers.
- RTO has a Debt/Equity ratio of 1.00. This is a neutral value indicating RTO is somewhat dependend on debt financing.
- RTO has a Debt to Equity ratio of 1.00. This is in the lower half of the industry: RTO underperforms 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1 | ||
| Debt/FCF | 8.79 | ||
| Altman-Z | 2.3 |
ROIC/WACC0.6
WACC7.72%
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: 70.00% 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 66.25% 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 -15.45% in the last year.
- RTO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.17% yearly.
- The Revenue has grown by 16.75% in the past year. This is quite good.
- The Revenue has been growing by 21.48% on average over the past years. This is a very strong growth!
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
- A Price/Earnings ratio of 26.25 indicates a quite expensive valuation of RTO.
- RTO's Price/Earnings ratio is a bit cheaper when compared to the industry. RTO is cheaper than 62.50% of the companies in the same industry.
- RTO's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.25.
- With a Price/Forward Earnings ratio of 19.61, RTO is valued on the expensive side.
- 75.00% of the companies in the same industry are more expensive than RTO, based on the Price/Forward Earnings ratio.
- The average S&P500 Price/Forward Earnings ratio is at 25.98. RTO is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.25 | ||
| Fwd PE | 19.61 |
4.2 Price Multiples
- RTO's Enterprise Value to EBITDA ratio is in line with 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 70.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.07 | ||
| EV/EBITDA | 15.2 |
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)2.28
PEG (5Y)3.21
EPS Next 2Y10.86%
EPS Next 3Y10.96%
5. Dividend
5.1 Amount
- RTO has a Yearly Dividend Yield of 1.88%. 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 0.82. RTO pays more dividend than 86.25% of the companies 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 been paying a dividend for at least 10 years, so it has 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.
- RTO's earnings are growing slower than its dividend. 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 26.25 and the Price/Book (PB) ratio is 3.13.
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.