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Why Rollins (ROL) Stock Gained 12.6% in the Past 3 Months?

·2 min read

Shares of Rollins, Inc. ROL have rallied 12.6% in the past three months, primarily on solid top-line growth and investor-friendly steps.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Reasons for Upside

Rollins’ organic revenue growth rate is driven by strong technician and customer retention. Enhancing benefits are expected to improve employee and customer retention for the coming years. For second-quarter 2022, revenues of $714 million improved 11.9% year over year. Organic revenues of $693.6 million increased 8.7% year over year.

Rollins believes in returning capital through dividends. Consistent dividend payment underscores its commitment to adding shareholder value and boosting its confidence in business. ROL paid out dividends of $208.7 million, $160.5 million and $153.8 million in 2021, 2020 and 2019, respectively.

ROL's current ratio (a measure of liquidity) stood at 0.98 at the end of second-quarter 2022, higher than the prior-year quarter’s 0.73. The gradually increasing current ratio bodes well for Rollins. This may imply that the risk of default is less. Shares have been up 8.7% in the year-to-date period.

Favorable Earnings Growth Rate

Driven by the above tailwinds, the Zacks Consensus Estimate for current-year earnings is pegged at 72 cents per share, indicating growth of 5.88% from the year-ago reported figure.

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 Zacks Business Services sector are Avis Budget Group, Inc. CAR, Genpact Limited G and CRA International, Inc. CRAI.

Avis Budget sports a Zacks Rank #1 at present. CAR has an earnings growth rate of 108.4% for 2022.

Avis Budget delivered a trailing four-quarter earnings surprise of 69.5%, on average.

Genpact carries a Zacks Rank #2 (Buy) at present. G has a long-term earnings growth expectation of 12.3%.

Genpact delivered a trailing four-quarter earnings surprise of 10.1%, on average.

CRA International carries a Zacks Rank of 2, currently. CRAI has a long-term earnings growth expectation of 14.3%.

CRAI delivered a trailing four-quarter earnings surprise of 26%, on average.


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