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Rollins (ROL) Rides on Strong Operating Platform and Buyouts

Rollins, Inc. ROL has been growing at a decent rate, thanks to the demand environment remaining in good shape. Its shareholder-friendly policy bodes well for the company.

Rollins reported second-quarter 2023 adjusted earnings of 23 cents per share, which matched the Zacks Consensus Estimate and increased 15% year over year. Revenues of $820.8 million beat the consensus mark by 2.1% and improved 14.9% year over year. Organic revenues of $769.6 million increased 7.7% year over year.

How is Rollins Faring?

The demand environment for this leading pest and termite control services provider remains in good shape, driven by strong construction activity. Revenues increased 14.9% year over year in the second quarter of 2023, with all its business lines — residential, commercial and termite — registering growth.

Rollins has developed its operating platform in a way that it increases cross-selling opportunities and cost efficiency, and facilitates swift customer service delivery. The company’s real-time service tracking and customer Internet communication technologies have increased its competitive advantage.

Its proprietary Branch Operating Support System facilitates service tracking and payment processing for technicians and provides virtual route management tools to increase route efficiency across the network, enabling cost reduction and increasing customer retention through quick response service.

Acquisitions are a significant catalyst for Rollins’ business development and are helping it expand its global brand recognition and geographical footprint, along with boosting its revenues. Notably, it completed 31 acquisitions in 2022, 39 in 2021 and 31 in 2020.

Rollins believes in returning capital through dividends. Consistent dividend payment underscores the company's commitment to shareholders and underlines its confidence in business. It paid dividends of $211.6 million, $208.7 million and $160.5 million in 2022, 2021 and 2020, respectively.

Earnings Snapshot of Some Other Service Providers

Automatic Data Processing ADP reported better-than-expected fourth-quarter fiscal 2023 results. Adjusted earnings per share (EPS) of $1.89 (excluding 1 cent from non-recurring items) beat the Zacks Consensus Estimate by 3.3% and grew 26% from the year-ago fiscal quarter’s figure.

ADP’s total revenues of $4.47 billion beat the consensus estimate by 1.8% and improved 8.5% from the year-ago fiscal quarter’s reading on a reported basis and 9% on an organic constant-currency basis.

TransUnion TRU reported impressive second-quarter 2023 results, wherein earnings and revenues beat the Zacks Consensus Estimate. Quarterly adjusted earnings of 86 cents per share (adjusting 58 cents from non-recurring items) surpassed the consensus mark by 3.6% but decreased 12.2% year over year.

TRU’s total revenues of $968 million beat the consensus mark by 1% and increased 2.1% year over year on a reported basis. Revenues were up 3% on a constant-currency basis, mainly driven by strength in international markets.

Gartner IT reported better-than-expected second-quarter 2023 results. Adjusted EPS (excluding 37 cents from non-recurring items) of $2.85 beat the Zacks Consensus Estimate by 14.9% and matched the year-ago reported figure.

IT's revenues of $1.5 billion beat the consensus estimate by 1% and improved 9.2% year over year on a reported basis and 10% on a foreign currency-neutral basis. The total contract value was $4.6 billion, up 8.9% year over year on a foreign currency-neutral basis.

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