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Reasons to Retain Rollins (ROL) Stock in Your Portfolio

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A favorable growth dynamics and a strong financial profile bode well for Rollins, Inc. (ROL - Free Report) . The company has an impressive Growth Scoreof B. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of the quality and sustainability of its growth.

Factors Aiding the Company

Demand environment for this building maintenance servicer remains in good shape driven by economic stability, rising consumer and government spending and decent construction activity.

The company’s revenue growth rate is healthy driven by strong employee and customer retention. Enhancing benefits are expected to improve retentions for the upcoming years.

The Clark and Northwest Pest Control acquisitions have started making significant contributions to Rollin’s revenues that improved 9.1% year over year in the second quarter of 2019.

Rollins is in excellent financial health, with plenty of ongoing cash generation and no debt. It has a consistent track record of rewarding shareholders through dividends.

Rollins, Inc. Dividend (TTM)

Some Hurdles to Counter

The company is witnessing escalation in costs resulting from acquisitions, lease expenses, IT and advertising. Moreover, its policy of acquiring a large number of companies could result in some integration risks.

Zacks Rank & Stocks to Consider

Rollins currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Business Services sector are CoreLogic , S&P Global (SPGI - Free Report) and Paychex (PAYX - Free Report) . While CoreLogic sports a Zacks Rank #1 (Strong Buy), S&P Global and Paychex carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings (three to five years) growth rate for CoreLogic, S&P Global and Paychex is estimated at 11%, 10% and 9%, respectively.

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