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Here's Why You Should Add Rollins' Stock to Your Portfolio

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Rollins, Inc. (ROL - Free Report) has performed extremely well year to date and has the potential to sustain the momentum going forward. Therefore, if you have not taken advantage of the share-price appreciation yet, it’s time you add the stock to your portfolio.

Let’s check out what makes the stock an attractive pick.

An Outperformer

A glimpse at the company’s price trend reveals that the stock has had an impressive run on the bourse year to date. Shares of Rollins have gained 65.4%, outperforming the 35.1% rise of the industry it belongs to.

Solid Rank

Rollins has a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2 offer attractive investment opportunities. Thus, the company is a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.

Northward Estimate Revisions

Two estimates for 2020 moved north in the past 60 days versus no downward revision, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for 2020 inched up 20%.

Strong Growth Prospects

The Zacks Consensus Estimate for 2020 earnings is currently pegged at 78 cents, indicating year-over-year growth of 6.9%. Further, earnings are expected to grow 8.6% in 2021.

Growth Factors

Rollins is benefiting from aggressive cost-reduction efforts, and routing and scheduling enhancements. The company’s recent cost-reduction efforts included coronavirus pandemic-induced temporary reduction of upper management‘s salaries and omission of non-essential travel and capital expenditures.

Although many companies across diverse sectors have suspended dividend payouts amid the coronavirus crisis, Rollins remains one of those few that are sailing through the tough economic time while maintaining dividend payouts. On Apr 28, the company announced a quarterly cash dividend of 8 cents payable on Jun 10 to shareholders on record as of  May 11. Rollins has a track record of consistent dividend payment. It paid $153.8 million, $152.7 million and $122 million in dividends during 2019, 2018 and 2017, respectively.

With the economy reopening and recovering gradually, both manufacturing and non-manufacturing activities have started gathering steam. Thus, the demand environment for Rollins’ services is expected to get healthier.

Other Stocks to Consider

Some other top-ranked stocks in the broader Zacks Business Services sector are Republic Services (RSG - Free Report) , IQVIA Holdings (IQV - Free Report) and ICF International (ICFI - Free Report) , each carrying a Zacks Rank #2 (Buy).

The long-term expected earnings per share (three to five years) growth rate for Republic Services, IQVIA Holdings and ICF International is 6.6%, 9.9% and 10%, respectively.

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