Rollins, Inc. ROL 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 earnings and revenues for 2020 are expected to grow 6.3% and 4.1%, respectively.
Factors That Bode Well
A balanced approach to organic and inorganic growth continues to benefit Rollins’ top line. Strong customer and employee retention keep organic revenues in good shape. Acquisitions are helping the company to expand globally. It made 30 and 38 acquisitions in 2019 and 2018, respectively.
Notably, Rollins’ total revenues were up 13.8% year over year in the last reported quarter. This included 8.1% from Clark and other acquisitions and the remaining 5.7% was from pricing and organic growth.
Rollins, Inc. Revenue (TTM)
Rollins, Inc. revenue-ttm | Rollins, Inc. Quote
Rollins believes in returning capital to shareholders and has a consistent track record of dividend payout. The company paid out $153.8 million in dividends in 2019. It paid out $152.7 million and $122 million in dividends in 2018 and 2017, respectively.
Rollins is witnessing escalation in expenses resulting from acquisitions and advertising spend. This keeps the company’s bottom line under pressure.
Further, Rollins’ policy of acquiring a large number of companies could result in some integration risks. Acquisitions can negatively impact its balance sheet in the form of a high level of goodwill and intangible assets. Moreover, frequent acquisitions are a distraction for management, which could impact organic growth.
Zacks Rank and Other Stocks to Consider
Rollins carry a Zacks Rank #3 (Hold).
Some other better-ranked stocks in the broader Zacks Business Services sector are Charles River Associates CRAI, Genpact Limited G and Blucora, Inc. BCOR. All the stocks carry a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term expected earnings per share (three to five years) growth rate for Charles River, Genpact and Blucora are 13%, 14% and 20%, respectively.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Charles River Associates (CRAI) : Free Stock Analysis Report
Rollins, Inc. (ROL) : Free Stock Analysis Report
Genpact Limited (G) : Free Stock Analysis Report
Blucora, Inc. (BCOR) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research