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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 the quality and sustainability of its growth.
The company’s shares have gained 16.1% in the past year against 2.1% decline of the industry it belongs to.
Aiding Factors
Acquisitions are a major growth catalyst in Rollins’ business strategy. With the help of strategic acquisitions, the company continues to expand its global brand recognition, geographical footprint and boost revenues. The company’ssubsidiary, Rollins UK Holdings Ltd., recently completed the purchase of two environment friendly companies,Albany Environmental Services Ltd. and Van Vynck Environmental Services. These marked the company’s 6th and 7th acquisitions in the UK. Considering their market reputation, both Albany and Van Vynck are promising additions in terms of geographical expansion as well as business improvement.
A balanced approach to organic and inorganic growth continues to aid Rollins’ top line. During the first quarter, Rollins reported strong revenue of $487.9 million which improved 13.7% on a year over year basis.
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 and maintaining dividend payouts. On Apr 28, the company announced a quarterly cash dividend of 8 cents payable on Jun 10 to shareholders as of record May 11. Rollins has a track record of consistent dividend payment. It had $153.8 million, $152.7 million and $122 million in dividends during 2019, 2018 and 2017, respectively.
Risks Associated
Rollins’ debt level has increased significantly quarter over quarter. Total debt at the end of first-quarter 2020 was $244 million, up from the $214 million recorded at the end of the prior quarter. The total debt to total capital ratio of 0.29 was higher than the previous quarter’s 0.26. An increasing debt-to-capitalization ratio indicates that the proportion of debt to finance the company’s assets is on the rise and so is the risk of insolvency.
Further, cash and cash equivalent balance of $93 million at the end of the first quarter was well below the debt level, which indicates that the company doesn’t have enough cash to meet this debt burden. Nevertheless, the cash level can meet the short-term debt of $13 million.
Long-term earnings (three to five years) growth rate for Elastic, SailPoint Technologies and DocuSign is estimated at 26%, 15% and 31.2%, respectively.
5 Stocks Set to Double
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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Here's Why You Should Hold on to Rollins (ROL) Stock Now
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 the quality and sustainability of its growth.
The company’s shares have gained 16.1% in the past year against 2.1% decline of the industry it belongs to.
Aiding Factors
Acquisitions are a major growth catalyst in Rollins’ business strategy. With the help of strategic acquisitions, the company continues to expand its global brand recognition, geographical footprint and boost revenues. The company’ssubsidiary, Rollins UK Holdings Ltd., recently completed the purchase of two environment friendly companies,Albany Environmental Services Ltd. and Van Vynck Environmental Services. These marked the company’s 6th and 7th acquisitions in the UK. Considering their market reputation, both Albany and Van Vynck are promising additions in terms of geographical expansion as well as business improvement.
A balanced approach to organic and inorganic growth continues to aid Rollins’ top line. During the first quarter, Rollins reported strong revenue of $487.9 million which improved 13.7% on a year over year basis.
Rollins, Inc. Revenue (TTM)
Rollins, Inc. revenue-ttm | Rollins, Inc. Quote
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 and maintaining dividend payouts. On Apr 28, the company announced a quarterly cash dividend of 8 cents payable on Jun 10 to shareholders as of record May 11.
Rollins has a track record of consistent dividend payment. It had $153.8 million, $152.7 million and $122 million in dividends during 2019, 2018 and 2017, respectively.
Risks Associated
Rollins’ debt level has increased significantly quarter over quarter. Total debt at the end of first-quarter 2020 was $244 million, up from the $214 million recorded at the end of the prior quarter. The total debt to total capital ratio of 0.29 was higher than the previous quarter’s 0.26. An increasing debt-to-capitalization ratio indicates that the proportion of debt to finance the company’s assets is on the rise and so is the risk of insolvency.
Further, cash and cash equivalent balance of $93 million at the end of the first quarter was well below the debt level, which indicates that the company doesn’t have enough cash to meet this debt burden. Nevertheless, the cash level can meet the short-term debt of $13 million.
Zacks Rank and Stocks to Consider
Rollins currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader Zacks Business Services sector are Elastic N.V. (ESTC - Free Report) , SailPoint Technologies Holdings, Inc. and DocuSign, Inc. (DOCU - Free Report) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Long-term earnings (three to five years) growth rate for Elastic, SailPoint Technologies and DocuSign is estimated at 26%, 15% and 31.2%, respectively.
5 Stocks Set to Double
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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