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Rollins (ROL) Continues to Ride on Acquisitions as Debt Ails

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Rollins, Inc. (ROL - Free Report) is a consistent dividend payer with a balanced approach to organic and inorganic growth. The company’s shares have gained 4.7% in the past year, outperforming the 1.2% growth of the industry it belongs to.

Zacks Investment Research
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Rollins recently reported fourth-quarter 2021 adjusted earnings of 14 cents per share, which aligned with the Zacks Consensus Estimate and increased 7.7% year over year. Revenues of $600.3 million beat the consensus mark by 3.3% and improved 11.9% year over year.

How is Rollins Doing?

Rollins’ revenues witnessed decent growth over the past five years. A balanced approach to organic and inorganic growth is the key to this success. 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 for the upcoming years.

Furthermore, acquisitions are a significant growth catalyst in Rollins’ business strategy. With the help of strategic acquisitions, the company continues to expand its global brand recognition and geographical footprint, while also boosting its revenues. Over the last three years, Rollins completed almost 100 acquisitions, including 39 in 2021. In 2021, the company witnessed revenue growth in its operations across Canada, Australia, the United Kingdom, and Singapore. Global network offers ample growth opportunity to access new markets.

The company has also been consistent in rewarding shareholders through dividend payments. Such consistent efforts not only instills investor confidence, but also positively impact the company’s earnings per share. These moves underscore the company's commitment to shareholders and underline its confidence in its business. The company paid dividends of $208.7 million, $160.5 million and $153.8 million in 2021, 2020 and 2019, respectively.

Meanwhile, Rollins has more long-term debt outstanding than cash. Cash and cash equivalent balance at the end of fourth-quarter 2021 was $105.3 million compared with the long-term debt level of $136.3 million. The cash level, however, can meet the short-term debt of $18.8 million.

Zacks Rank and Stocks to Consider

Rollins currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the broader Business Services sector that investors may consider are Cross Country Healthcare (CCRN - Free Report) , Accenture (ACN - Free Report) and Clean Harbors (CLH - Free Report) . While Cross Country Healthcare sports a Zacks Rank #1, Accenture and Clean Harbors carry a Zacks Rank #2 (Buy) at present.

Cross Country Healthcare has a trailing four-quarter earnings surprise of 41.5%, on average.

Cross Country Healthcare’s shares have surged 68% in the past year. The company has a long-term earnings growth of 6.5%.

Accenture has an expected earnings growth rate of 19.8% for the current year. The company has a trailing four-quarter earnings surprise of 5.3%, on average.

Accenture’s shares have surged 26% in the past year. The company has a long-term earnings growth of 10%.

Clean Harbors has an expected earnings growth rate of 17% for the current year. The company has a trailing four-quarter earnings surprise of 43.2%, on average.

Clean Harbors’ shares have surged 11.9% in the past year.

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