Rollins, Inc. (NYSE:ROL) Stock Has Shown Weakness Lately But Financials Look Strong: Should Prospective Shareholders Make The Leap?

Simply Wall St.12-12

With its stock down 2.1% over the past month, it is easy to disregard Rollins (NYSE:ROL). However, a closer look at its sound financials might cause you to think again. Given that fundamentals usually...

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(NYSE:ROL) Stock Has Shown Weakness Lately But Financials Look Strong: Should Prospective Shareholders Make The Leap?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-12-12 00:32 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/rollins-inc-nyse-rol-stock-163202528.html><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>With its stock down 2.1% over the past month, it is easy to disregard Rollins (NYSE:ROL). However, a closer look at its sound financials might cause you to think again. Given that fundamentals usually...</p>\n\n<a href=\"https://finance.yahoo.com/news/rollins-inc-nyse-rol-stock-163202528.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU1923622291.USD","symbol_name":"Natixis Thematics Safety R/A USD","start_time":0,"source_url":"https://finance.yahoo.com/news/rollins-inc-nyse-rol-stock-163202528.html","article_id":"2490215867","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/D8P2dzqO3aYlIUk60ncgmw--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/simply_wall_st__316/0f73f62416a2e777bfbf08e8e1baa10a"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2490215867","pubTimestamp":1733934722,"columns":[],"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"With its stock down 2.1% over the past month, it is easy to disregard Rollins . However, a closer look at its sound financials might cause you to think again. Given that fundamentals usually drive long-term market outcomes, the company is worth looking at. Particularly, we will be paying attention to Rollins'  ROE today.Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. In short, ROE shows the profit each dollar generates with respect to its shareholder investments.Return on Equity = Net Profit  ÷ Shareholders' Equity. So, based on the above formula, the ROE for Rollins is:. Rollins has a significant three-year median payout ratio of 59%, meaning that it is left with only 41% to reinvest into its business. This implies that the company has been able to achieve decent earnings growth despite returning most of its profits to shareholders.Besides, Rollins has been paying dividends for at","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU1923622291.USD":"Natixis Thematics Safety R/A USD","NYSE":"纽交所","ROL":"Rollins Inc","LU2125909916.SGD":"Natixis Thematics Safety R/A SGD","BK4585":"ETF&股票定投概念","BK4120":"环境与设施服务","BK4588":"碎股","LU2125909759.SGD":"Natixis Thematics Safety H-R/A SGD"},"translate_title":"罗林斯公司（纽约证券交易所股票代码：ROL）的股票最近表现疲软，但财务状况看起来强劲：潜在股东应该迈出这一步吗？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"NYSE":1,"ROL":1},"content_text":"With its stock down 2.1% over the past month, it is easy to disregard Rollins (NYSE:ROL). However, a closer look at its sound financials might cause you to think again. Given that fundamentals usually drive long-term market outcomes, the company is worth looking at. Particularly, we will be paying attention to Rollins'  ROE today. \n Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. In short, ROE shows the profit each dollar generates with respect to its shareholder investments. \n See our latest analysis for Rollins \n How Do You Calculate Return On Equity? \n The formula for ROE is: \n Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity \nSo, based on the above formula, the ROE for Rollins is:\n36% = US$470m ÷ US$1.3b (Based on the trailing twelve months to September 2024).\n The 'return' is the income the business earned over the last year. Another way to think of that is that for every $1 worth of equity, the company was able to earn $0.36 in profit. \n What Has ROE Got To Do With Earnings Growth? \n We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. Depending on how much of these profits the company reinvests or \"retains\", and how effectively it does so, we are then able to assess a company’s earnings growth potential. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features. \n Rollins' Earnings Growth And 36% ROE \n First thing first, we like that Rollins has an impressive ROE. Secondly, even when compared to the industry average of 12% the company's ROE is quite impressive. This probably laid the groundwork for Rollins' moderate 16% net income growth seen over the past five years. \n As a next step, we compared Rollins' net income growth with the industry, and pleasingly, we found that the growth seen by the company is higher than the average industry growth of 11%. \n\n\n\n  NYSE:ROL Past Earnings Growth December 11th 2024\n \n\n Earnings growth is an important metric to consider when valuing a stock. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. This then helps them determine if the stock is placed for a bright or bleak future. Is ROL fairly valued? This infographic on the company's intrinsic value  has everything you need to know. \n Is Rollins Making Efficient Use Of Its Profits? \n Rollins has a significant three-year median payout ratio of 59%, meaning that it is left with only 41% to reinvest into its business. This implies that the company has been able to achieve decent earnings growth despite returning most of its profits to shareholders. \n Besides, Rollins has been paying dividends for at least ten years or more. This shows that the company is committed to sharing profits with its shareholders. Our latest analyst data shows that the future payout ratio of the company over the next three years is expected to be approximately 63%. As a result, Rollins' ROE is not expected to change by much either, which we inferred from the analyst estimate of 33% for future ROE. \n Conclusion \n In total, we are pretty happy with Rollins' performance. Especially the high ROE, Which has contributed to the impressive growth seen in earnings. Despite the company reinvesting only a small portion of its profits, it still has managed to grow its earnings so that is appreciable. Having said that, the company's earnings growth is expected to slow down, as forecasted in the current analyst estimates. Are these analysts expectations based on the broad expectations for the industry, or on the company's fundamentals? Click here to be taken to our analyst's forecasts page for the company. \nHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. 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