Rentokil Initial PLC RTO

Morningstar Rating
GBX328.00 −0.30 (0.09%)
View Full Chart

Company Report

While We Acknowledge the Potential Upside of Restructuring, Short-Term Weakness Hurts Fair Value

Rentokil Initial is the largest pest control firm operating primarily in residential and commercial services. The industry is highly fragmented, with Rentokil, Rollins, and a few smaller global competitors, as well as over 40,000 regional and local players worldwide. Rentokil’s scale is a cost advantage, as its ability to spread fixed costs across a larger revenue base and its local route density contribute to industry-leading margins.

Price vs Fair Value

RTO is trading at a LOCK|RYDB$x premium.
Price
GBX328.30
Fair Value
LOCK|s#
Uncertainty
LOCK|>Pz
1-Star Price
LOCK|l.B
5-Star Price
SK@
Economic Moat
LOCK|Y^Z$Q
Capital Allocation
LOCK|nJ&#&@

Bulls Say, Bears Say

Bulls

The Terminix acquisition bolsters Rentokil’s cost advantage from route density and offers higher margin potential after the integration.

Bears

As the industry consolidates, deal multiples could rise on the 40-50 acquisitions that Rentokil completes a year, harming return on invested capital.

Trading Information

Previous Close Price
GBX328.30
Day Range
GBX322.70328.20
52-Week Range
GBX322.70507.00
Bid/Ask
GBX315.00 / GBX380.00
Shares Outstanding
2.52B
Market Cap
GBX825.33B
Volume/Avg
18M / 11M

Key Statistics

Price/Earnings (Normalized)
16.12
Price/Sales
1.57
Dividend Yield (Trailing)
2.86%
Dividend Yield (Forward)
2.86%
Dividend Payment Schedule
May, Sep
Total Yield
2.86%

Company Profile

Rentokil Initial is the largest global provider of route-based pest control and commercial hygiene services, operating in over 90 countries, with its largest operations in the United States following the acquisition of Terminix. The group also offers a range of specialist route-based services, including office and commercial space plant care, property care, and workwear rentals. The group serves a diverse client base of global food producers, hotel chains, industrial goods companies, restaurants, and individual residential customers.
Sector
Industrials
Industry
Specialty Business Services
Stock Style Box
Mid Core
Total Number of Employees
64,084

Competitors

Valuation

Metric
RTO
ECL
ROL
Price/Earnings (Normalized)
16.1234.5229.16
Price/Book Value
1.987.6411.28
Price/Sales
1.574.624.12
Price/Cash Flow
12.4123.1121.53
Price/Earnings
RTO
ECL
ROL

Financial Strength

Metric
RTO
ECL
ROL
Quick Ratio
0.971.500.42
Current Ratio
1.061.840.63
Interest Coverage
2.478.9421.79
Quick Ratio
RTO
ECL
ROL

Profitability

Metric
RTO
ECL
ROL
Return on Assets (Normalized)
4.72%8.85%17.28%
Return on Equity (Normalized)
12.53%23.06%38.73%
Return on Invested Capital (Normalized)
7.34%12.44%23.67%
Return on Assets
RTO
ECL
ROL

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