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RTO

Rentokil InitialLSE:RTO Stock Report

Last Price

UK£5.26

Market Cap

UK£9.7b

7D

1.4%

1Y

0%

Updated

21 Jan, 2022

Data

Company Financials +
RTO fundamental analysis
Snowflake Score
Valuation2/6
Future Growth4/6
Past Performance2/6
Financial Health5/6
Dividends0/6

RTO Stock Overview

Rentokil Initial plc, together with its subsidiaries, provides route-based services in North America, the United Kingdom, rest of Europe, Asia, the Pacific, and internationally.

Rentokil Initial Competitors

Accenture

NYSE:ACN

US$216.6b

Ecolab

NYSE:ECL

US$61.1b

Johnson Controls International

NYSE:JCI

US$51.2b

Compass Group

LSE:CPG

UK£30.0b

Price History & Performance

Summary of all time highs, changes and price drops for Rentokil Initial
Historical stock prices
Current Share PriceUK£5.26
52 Week HighUK£6.62
52 Week LowUK£4.58
Beta0.31
1 Month Change-7.69%
3 Month Change-12.10%
1 Year Change0%
3 Year Change57.58%
5 Year Change133.05%
Change since IPO504.60%

Recent News & Updates

Jan 11
A Look At The Fair Value Of Rentokil Initial plc (LON:RTO)

A Look At The Fair Value Of Rentokil Initial plc (LON:RTO)

How far off is Rentokil Initial plc ( LON:RTO ) from its intrinsic value? Using the most recent financial data, we'll...

Dec 03
Here's Why I Think Rentokil Initial (LON:RTO) Is An Interesting Stock

Here's Why I Think Rentokil Initial (LON:RTO) Is An Interesting Stock

Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling...

Nov 18
These 4 Measures Indicate That Rentokil Initial (LON:RTO) Is Using Debt Safely

These 4 Measures Indicate That Rentokil Initial (LON:RTO) Is Using Debt Safely

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...

Shareholder Returns

RTOGB Commercial ServicesGB Market
7D1.4%-0.7%-0.5%
1Y0%5.7%8.7%

Return vs Industry: RTO underperformed the UK Commercial Services industry which returned 5.7% over the past year.

Return vs Market: RTO underperformed the UK Market which returned 8.7% over the past year.

Price Volatility

Is RTO's price volatile compared to industry and market?
RTO volatility
RTO Average Weekly Movement5.0%
Commercial Services Industry Average Movement4.5%
Market Average Movement5.0%
10% most volatile stocks in GB Market10.7%
10% least volatile stocks in GB Market2.5%

Stable Share Price: RTO is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: RTO's weekly volatility (5%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
190344,500Andy Ransomhttps://www.rentokil-initial.com

Rentokil Initial plc, together with its subsidiaries, provides route-based services in North America, the United Kingdom, rest of Europe, Asia, the Pacific, and internationally. It offers a range of pest control services from rodents to flying and crawling insects, as well as to other forms of wildlife management for commercial and residential customers. The company also provides hygiene services, including the provision and maintenance of products, such as air fresheners, sanitizers, feminine hygiene units, hand dryers, paper and linen towel dispensers, soap and hand sanitizer dispensers, toilet paper dispensers, and floor protection mats.

Rentokil Initial Fundamentals Summary

How do Rentokil Initial's earnings and revenue compare to its market cap?
RTO fundamental statistics
Market CapUK£9.74b
Earnings (TTM)UK£258.40m
Revenue (TTM)UK£3.00b

37.7x

P/E Ratio

3.3x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
RTO income statement (TTM)
RevenueUK£3.00b
Cost of RevenueUK£703.90m
Gross ProfitUK£2.29b
ExpensesUK£2.03b
EarningsUK£258.40m

Last Reported Earnings

Jun 30, 2021

Next Earnings Date

Mar 03, 2022

Earnings per share (EPS)0.14
Gross Margin76.50%
Net Profit Margin8.63%
Debt/Equity Ratio234.1%

How did RTO perform over the long term?

See historical performance and comparison

Dividends

0.8%

Current Dividend Yield

54%

Payout Ratio

Valuation

Is Rentokil Initial undervalued compared to its fair value and its price relative to the market?

21.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RTO (£5.26) is trading below our estimate of fair value (£6.68)

Significantly Below Fair Value: RTO is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: RTO's PE Ratio (37.7x) is in line with the UK Commercial Services industry average.

PE vs Market: RTO is poor value based on its PE Ratio (37.7x) compared to the UK market (19.1x).


Price to Earnings Growth Ratio

PEG Ratio: RTO is poor value based on its PEG Ratio (2.5x)


Price to Book Ratio

PB vs Industry: RTO is overvalued based on its PB Ratio (8.6x) compared to the GB Commercial Services industry average (2.6x).


Future Growth

How is Rentokil Initial forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

15.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RTO's forecast earnings growth (15.1% per year) is above the savings rate (0.9%).

Earnings vs Market: RTO's earnings (15.1% per year) are forecast to grow faster than the UK market (12.1% per year).

High Growth Earnings: RTO's earnings are forecast to grow, but not significantly.

Revenue vs Market: RTO's revenue (7% per year) is forecast to grow faster than the UK market (4.9% per year).

High Growth Revenue: RTO's revenue (7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: RTO's Return on Equity is forecast to be high in 3 years time (22.4%)


Past Performance

How has Rentokil Initial performed over the past 5 years?

-14.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RTO has high quality earnings.

Growing Profit Margin: RTO's current net profit margins (8.6%) are lower than last year (9%).


Past Earnings Growth Analysis

Earnings Trend: RTO's earnings have declined by 14.5% per year over the past 5 years.

Accelerating Growth: RTO's earnings growth over the past year (6.4%) exceeds its 5-year average (-14.5% per year).

Earnings vs Industry: RTO earnings growth over the past year (6.4%) underperformed the Commercial Services industry 35.3%.


Return on Equity

High ROE: Whilst RTO's Return on Equity (22.76%) is high, this metric is skewed due to their high level of debt.


Financial Health

How is Rentokil Initial's financial position?


Financial Position Analysis

Short Term Liabilities: RTO's short term assets (£2.4B) exceed its short term liabilities (£2.3B).

Long Term Liabilities: RTO's short term assets (£2.4B) exceed its long term liabilities (£1.7B).


Debt to Equity History and Analysis

Debt Level: RTO's net debt to equity ratio (81.4%) is considered high.

Reducing Debt: RTO's debt to equity ratio has reduced from 385.2% to 234.1% over the past 5 years.

Debt Coverage: RTO's debt is well covered by operating cash flow (23.9%).

Interest Coverage: RTO's interest payments on its debt are well covered by EBIT (10.6x coverage).


Balance Sheet


Dividend

What is Rentokil Initial current dividend yield, its reliability and sustainability?

0.79%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: RTO's dividend (0.79%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.37%).

High Dividend: RTO's dividend (0.79%) is low compared to the top 25% of dividend payers in the UK market (4.04%).


Stability and Growth of Payments

Stable Dividend: RTO is not paying a notable dividend for the UK market, therefore no need to check if payments are stable.

Growing Dividend: RTO is not paying a notable dividend for the UK market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: RTO is not paying a notable dividend for the UK market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of RTO's dividend in 3 years as they are not forecast to pay a notable one for the UK market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

7.3yrs

Average management tenure


CEO

Andy Ransom (58 yo)

8.25yrs

Tenure

UK£4,055,200

Compensation

Mr. Andrew M. Ransom, also known as Andy, has been the Chief Executive Officer of Rentokil Initial plc since October 1, 2013. Mr. Ransom serves as Non-Executive Director and Senior Independent Director of...


CEO Compensation Analysis

Compensation vs Market: Andy's total compensation ($USD5.50M) is above average for companies of similar size in the UK market ($USD3.96M).

Compensation vs Earnings: Andy's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: RTO's management team is seasoned and experienced (7.3 years average tenure).


Board Members

Experienced Board: RTO's board of directors are considered experienced (4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: RTO insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Rentokil Initial plc's employee growth, exchange listings and data sources


Key Information

  • Name: Rentokil Initial plc
  • Ticker: RTO
  • Exchange: LSE
  • Founded: 1903
  • Industry: Environmental and Facilities Services
  • Sector: Commercial Services
  • Implied Market Cap: UK£9.740b
  • Shares outstanding: 1.85b
  • Website: https://www.rentokil-initial.com

Number of Employees


Location

  • Rentokil Initial plc
  • Meadows Business Park
  • Riverbank
  • Camberley
  • Surrey
  • GU17 9AB
  • United Kingdom

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/01/21 21:15
End of Day Share Price2022/01/21 00:00
Earnings2021/06/30
Annual Earnings2020/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.