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Here's Why You Should Hold On to Rollins (ROL) Stock Now

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Rollins, Inc. (ROL - Free Report) has an impressive Growth Score of A. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of quality and sustainability of its growth.

The company’s earnings are anticipated to register growth of 14.8% and 8.6% in 2021 and 2022, respectively. The company’s shares have gained 42.2% in the past year.

 Key Growth Drivers

Demand environment for this building maintenance servicer is in good shape driven by decent construction activity.  

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

Rollins’ total debt to total capital ratio at the end of fourth quarter 2020 was 0.17, lower than the industry’s 0.22. Lower debt-to-capitalization ratio indicates that the proportion of debt to finance the company’s assets is declining and so is the risk of insolvency.  

Primary Concern

Rollins is witnessing escalation in costs resulting from acquisitions and IT related expenses. In addition, the company’s subsidiaries are embroiled with a number of lawsuits, claims or arbitrations that allege its services caused damage. This is further adding to costs. Hence, the company's bottom line is likely to remain under pressure going forward.

Zacks Rank and Stocks to Consider

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

Some better-ranked service stocks are CRA International, Inc. (CRAI - Free Report) , Gartner, Inc. (IT - Free Report) and TeleTech Holdings (TTEC - Free Report) . CRA International and Gartner carry a Zacks Rank #2 (Buy), while TeleTech sports a Zacks #1 Rank (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term expected earnings per share (three to five years) growth rate for CRA International, Gartner and TeleTech is pegged at 13%, 13.5% and 14.7%, respectively.

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Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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