RENTOKIL INITIAL PLC-SP ADR (RTO)
US7601251041 - ADR
Overall RTO gets a fundamental rating of 5 out of 10. We evaluated RTO against 84 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.
In the past 5 years RTO has always been profitable.
Each year in the past 5 years RTO had a positive operating cash flow.
1.2 Ratios
The Return On Assets of RTO (3.42%) is better than 66.67% of its industry peers.
RTO has a better Return On Equity (9.32%) than 71.43% of its industry peers.
RTO has a better Return On Invested Capital (6.22%) than 61.90% of its industry peers.
RTO had an Average Return On Invested Capital over the past 3 years of 6.24%. This is below the industry average of 9.40%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.42% | ||
| ROE | 9.32% | ||
| ROIC | 6.22% |
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 better Profit Margin (7.09%) than 80.95% of its industry peers.
RTO's Profit Margin has improved in the last couple of years.
RTO has a Operating Margin of 12.71%. This is in the better half of the industry: RTO outperforms 78.57% of its industry peers.
RTO's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 83.26%, RTO belongs to the best of the industry, outperforming 97.62% 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 | 12.71% | ||
| PM (TTM) | 7.09% | ||
| GM | 83.26% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), RTO is destroying value.
RTO has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for RTO has been increased compared to 5 years ago.
RTO has a better debt/assets ratio than last year.
2.2 Solvency
RTO has an Altman-Z score of 2.31. 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's Altman-Z score of 2.31 is in line compared to the rest of the industry. RTO outperforms 57.14% of its industry peers.
RTO has a debt to FCF ratio of 9.00. This is a slightly negative value and a sign of low solvency as RTO would need 9.00 years to pay back of all of its debts.
RTO's Debt to FCF ratio of 9.00 is in line compared to the rest of the industry. RTO outperforms 53.57% of its industry peers.
RTO has a Debt/Equity ratio of 0.85. This is a neutral value indicating RTO is somewhat dependend on debt financing.
RTO has a Debt to Equity ratio (0.85) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.85 | ||
| Debt/FCF | 9 | ||
| Altman-Z | 2.31 |
ROIC/WACC0.87
WACC7.13%
2.3 Liquidity
RTO has a Current Ratio of 1.05. 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 Current ratio of 1.05. This is in the lower half of the industry: RTO underperforms 76.19% of its industry peers.
A Quick Ratio of 0.97 indicates that RTO may have some problems paying its short term obligations.
The Quick ratio of RTO (0.97) is worse than 70.24% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.05 | ||
| Quick Ratio | 0.97 |
3. Growth
3.1 Past
RTO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 8.77%, which is quite good.
The Earnings Per Share has been growing by 12.22% on average over the past years. This is quite good.
The Revenue has grown by 44.72% in the past year. This is a very strong growth!
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)8.77%
EPS 3Y14.71%
EPS 5Y12.22%
EPS Q2Q%-0.51%
Revenue 1Y (TTM)44.72%
Revenue growth 3Y24.23%
Revenue growth 5Y16.8%
Sales Q2Q%26.24%
3.2 Future
The Earnings Per Share is expected to grow by 10.42% on average over the next years. This is quite good.
Based on estimates for the next years, RTO will show a small growth in Revenue. The Revenue will grow by 5.51% on average per year.
EPS Next Y5.35%
EPS Next 2Y9.27%
EPS Next 3Y10.42%
EPS Next 5YN/A
Revenue Next Year2.84%
Revenue Next 2Y3.82%
Revenue Next 3Y4.24%
Revenue Next 5Y5.51%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
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
A Price/Earnings ratio of 20.75 indicates a rather expensive valuation of RTO.
Compared to the rest of the industry, the Price/Earnings ratio of RTO indicates a somewhat cheap valuation: RTO is cheaper than 71.43% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.36, RTO is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 19.71, 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 63.10% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of RTO to the average of the S&P500 Index (20.19), we can say RTO is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.75 | ||
| Fwd PE | 19.71 |
4.2 Price Multiples
RTO's Enterprise Value to EBITDA ratio is in line with the industry average.
67.86% of the companies in the same industry are more expensive than RTO, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.99 | ||
| EV/EBITDA | 12.95 |
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.
RTO has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)3.88
PEG (5Y)1.7
EPS Next 2Y9.27%
EPS Next 3Y10.42%
5. Dividend
5.1 Amount
RTO has a Yearly Dividend Yield of 1.86%.
Compared to an average industry Dividend Yield of 2.41, RTO pays a better dividend. On top of this RTO pays more dividend than 83.33% of the companies listed in the same industry.
RTO's Dividend Yield is slightly below the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.86% |
5.2 History
The dividend of RTO is nicely growing with an annual growth rate of 14.61%!
RTO has been paying a dividend for at least 10 years, so it has a reliable track record.
RTO has decreased its dividend recently.
Dividend Growth(5Y)14.61%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
RTO pays out 52.76% of its income as dividend. 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.
DP52.76%
EPS Next 2Y9.27%
EPS Next 3Y10.42%
RENTOKIL INITIAL PLC-SP ADR
NYSE:RTO (7/5/2024, 6:17:48 PM)
After market: 30.71 0 (0%)30.71
+0.66 (+2.2%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap15.43B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.86% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.75 | ||
| Fwd PE | 19.71 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)3.88
PEG (5Y)1.7
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.42% | ||
| ROE | 9.32% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 12.71% | ||
| PM (TTM) | 7.09% | ||
| GM | 83.26% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.48
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.85 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.05 | ||
| Quick Ratio | 0.97 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)8.77%
EPS 3Y14.71%
EPS 5Y
EPS Q2Q%
EPS Next Y5.35%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)44.72%
Revenue growth 3Y24.23%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y