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Here's Why a Hold Strategy is Apt for Rollins (ROL) Stock Now

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Rollins, Inc. (ROL - Free Report) has an impressive Growth Score of B. This style score condenses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth.

The company’s earnings for 2022 and 2023 are expected to improve 5.9% and 9.7%, respectively, year over year.Shares have gained 5.8% year to date.

Factors That Augur Well

This leading pest and termite control services provider is benefiting from strength in all of its business lines. The company’s revenues increased 11.9% year over year in the first quarter of 2022, with all of its business lines — residential, commercial and termite — registering growth.

Acquisitions are a significant catalyst for Rollins’ business development. These are helping the company expand its global brand recognition and geographical footprint and boost its revenues. The company completed 22 purchases in the first half of 2022. Over the last three years, Rollins completed around 100 transaction deals, including 39 in 2021.

Rollins believes in returning capital through dividends. Consistent dividend payments underscore the company's commitment to shareholders and its business confidence. The company paid dividends of $208.7 million, $160.5 million and $153.8 million in 2021, 2020 and 2019, respectively.

Rollins' current ratio (a measure of liquidity) stood at 0.98 at the end of the second quarter of 2022, higher than the 0.73 recorded at the end of second-quarter 2021. The increase in the current ratio bodes for the company as it implies that the risk of default is less.

Some Risks

Rollins’ margin stayed under pressure in the second quarter of 2022 due to the increase in fuel and vehicle repair expenses. Adjusted EBITDA margin of 22.3% declined 235 basis points year over year.

Zacks Rank & Stocks to Consider

Rollins currently carries a Zacks Rank #3 (Hold).

Investors interested in the broader Zacks Business Services sector can consider stocks like Paychex, Inc. (PAYX - Free Report) and Cross Country Healthcare, Inc. (CCRN - Free Report) .

Paychex currently carries a Zacks Rank #2 (Buy). PAYX has a long-term earnings growth expectation of 7.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Paychex delivered a trailing four-quarter earnings surprise of 8.6%, on average.

Cross Country Healthcare currently carriesa Zacks Rank of 2. CCRN has a long-term earnings growth expectation of 10%.

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


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