RENTOKIL INITIAL PLC-SP ADR (RTO)
US7601251041 - ADR
We assign a fundamental rating of 5 out of 10 to RTO. RTO was compared to 83 industry peers in the Commercial Services & Supplies industry. RTO has an excellent profitability rating, but there are concerns on its financial health. RTO has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year RTO was profitable.
RTO had a positive operating cash flow in the past year.
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
RTO's Return On Assets of 3.49% is fine compared to the rest of the industry. RTO outperforms 63.41% of its industry peers.
RTO has a Return On Equity of 9.41%. This is in the better half of the industry: RTO outperforms 67.07% of its industry peers.
The Return On Invested Capital of RTO (6.32%) is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for RTO is below the industry average of 10.10%.
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
RTO has a Profit Margin of 7.25%. This is in the better half of the industry: RTO outperforms 75.61% of its industry peers.
RTO's Profit Margin has improved in the last couple of years.
The Operating Margin of RTO (12.92%) is better than 76.83% of its industry peers.
RTO's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 82.72%, RTO belongs to the top of the industry, outperforming 96.34% of the companies in the same industry.
RTO's Gross Margin has been stable in the last couple of years.
| 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
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.
The number of shares outstanding for RTO has been increased compared to 5 years ago.
Compared to 1 year ago, RTO has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.03 indicates that RTO is not a great score, but indicates only limited risk for bankruptcy at the moment.
RTO has a Altman-Z score (2.03) which is comparable to the rest of the 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.
With a Debt to FCF ratio value of 9.54, RTO perfoms like the industry average, outperforming 53.66% of the companies in the same industry.
A Debt/Equity ratio of 0.82 indicates that RTO is somewhat dependend on debt financing.
The Debt to Equity ratio of RTO (0.82) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.82 | ||
| Debt/FCF | 9.54 | ||
| Altman-Z | 2.03 |
ROIC/WACC0.91
WACC6.97%
2.3 Liquidity
A Current Ratio of 1.04 indicates that RTO should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.04, RTO is doing worse than 74.39% of the companies in the same industry.
RTO has a Quick Ratio of 1.04. This is a bad value and indicates that RTO is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.96, RTO is doing worse than 69.51% of the companies in the same industry.
| 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.
The Revenue has grown by 12.41% in the past year. This is quite good.
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
The Earnings Per Share is expected to grow by 4.56% on average over the next years.
RTO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.45% yearly.
EPS Next Y-6.37%
EPS Next 2Y-0.1%
EPS Next 3Y3.93%
EPS Next 5Y4.56%
Revenue Next Year1.14%
Revenue Next 2Y1.97%
Revenue Next 3Y2.64%
Revenue Next 5Y7.45%
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
Based on the Price/Earnings ratio of 16.41, the valuation of RTO can be described as correct.
Based on the Price/Earnings ratio, RTO is valued a bit cheaper than the industry average as 74.39% of the companies are valued more expensively.
RTO's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.28.
Based on the Price/Forward Earnings ratio of 16.52, the valuation of RTO can be described as correct.
Based on the Price/Forward Earnings ratio, RTO is valued a bit cheaper than 78.05% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of RTO to the average of the S&P500 Index (23.53), we can say RTO is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.41 | ||
| Fwd PE | 16.52 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, RTO is valued a bit cheaper than the industry average as 64.63% of the companies are valued more expensively.
RTO's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. RTO is cheaper than 69.51% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.34 | ||
| EV/EBITDA | 10.87 |
4.3 Compensation for Growth
The decent profitability rating of RTO may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.34
EPS Next 2Y-0.1%
EPS Next 3Y3.93%
5. Dividend
5.1 Amount
RTO has a Yearly Dividend Yield of 2.35%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.15, RTO pays a better dividend. On top of this RTO pays more dividend than 85.37% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.33, RTO has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.35% |
5.2 History
The dividend of RTO is nicely growing with an annual growth rate of 14.61%!
RTO has paid a dividend for at least 10 years, which is 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.
RTO's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP55.87%
EPS Next 2Y-0.1%
EPS Next 3Y3.93%
RENTOKIL INITIAL PLC-SP ADR
NYSE:RTO (1/14/2025, 8:04:01 PM)
Premarket: 23.06 -0.24 (-1.03%)23.3
-0.63 (-2.63%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners99.13%
Inst Owner ChangeN/A
Ins Owners0.32%
Ins Owner ChangeN/A
Market Cap11.70B
Analysts74.62
Price Target29.92 (28.41%)
Short Float %0.59%
Short Ratio4.28
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.35% |
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)1.69%
PT rev (3m)-5.82%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)0%
EPS NY rev (3m)-9.62%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0.07%
Revenue NY rev (3m)0.02%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.41 | ||
| Fwd PE | 16.52 | ||
| P/S | 1.78 | ||
| P/FCF | 19.34 | ||
| P/OCF | 13.52 | ||
| P/B | 2.31 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.87 |
EPS(TTM)1.42
EY6.09%
EPS(NY)1.41
Fwd EY6.05%
FCF(TTM)1.21
FCFY5.17%
OCF(TTM)1.72
OCFY7.39%
SpS13.09
BVpS10.08
TBVpS-7.17
PEG (NY)N/A
PEG (5Y)1.34
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 | 2.03 |
F-Score7
WACC6.97%
ROIC/WACC0.91
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-6.37%
EPS Next 2Y-0.1%
EPS Next 3Y3.93%
EPS Next 5Y4.56%
Revenue 1Y (TTM)12.41%
Revenue growth 3Y24.23%
Revenue growth 5Y16.8%
Sales Q2Q%1.31%
Revenue Next Year1.14%
Revenue Next 2Y1.97%
Revenue Next 3Y2.64%
Revenue Next 5Y7.45%
EBIT growth 1Y-4.04%
EBIT growth 3Y34.43%
EBIT growth 5Y22.67%
EBIT Next Year34.83%
EBIT Next 3Y15.57%
EBIT Next 5Y16.93%
FCF growth 1Y55.09%
FCF growth 3Y10.02%
FCF growth 5Y22.14%
OCF growth 1Y44.57%
OCF growth 3Y10.38%
OCF growth 5Y15.18%