Fact based stock research
Rentokil Initial (LSE:RTO)
GB00B082RF11
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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Rentokil Initial stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 8 (worse than 92% compared with investment alternatives), Rentokil Initial (Facility Services, United Kingdom) shares have lower financial characteristics compared with similar stocks. Shares of Rentokil Initial are a good value (attractively priced) with a consolidated Value Rank of 59 (better than 59% of alternatives) but show below-average growth (Growth Rank of 17), and are riskily financed (Safety Rank of 28), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 8, is a sell recommendation based on Rentokil Initial's financial characteristics. As the company Rentokil Initial's key financial metrics exhibit good value (Obermatt Value Rank of 59) but low growth (Obermatt Growth Rank of 17) and risky financing practices (Obermatt Safety Rank of 28), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 59% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
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360° Viewnew| Country | United Kingdom |
| Industry | Facility Services |
| Index | FTSE All Shares, FTSE 100, FTSE 350, Dividends Europe, Employee Focus EU |
| Size class | X-Large |
This stock has achievements: Gold Winner CEO.
14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.
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Review the performance ranks of the individual metrics that form each investment strategy.
Research History: Rentokil Initial
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 7 |
|
97 |
|
86 |
|
59 |
|
| GROWTH | ||||||||
| GROWTH | 48 |
|
35 |
|
42 |
|
17 |
|
| SAFETY | ||||||||
| SAFETY | 32 |
|
9 |
|
28 |
|
28 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
30 |
|
58 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
35 |
|
59 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 8 (worse than 92% compared with investment alternatives), Rentokil Initial (Facility Services, United Kingdom) shares have lower financial characteristics compared with similar stocks. Shares of Rentokil Initial are a good value (attractively priced) with a consolidated Value Rank of 59 (better than 59% of alternatives) but show below-average growth (Growth Rank of 17), and are riskily financed (Safety Rank of 28), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 8, is a sell recommendation based on Rentokil Initial's financial characteristics. As the company Rentokil Initial's key financial metrics exhibit good value (Obermatt Value Rank of 59) but low growth (Obermatt Growth Rank of 17) and risky financing practices (Obermatt Safety Rank of 28), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 59% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 7 |
|
97 |
|
86 |
|
59 |
|
| GROWTH | ||||||||
| GROWTH | 48 |
|
35 |
|
42 |
|
17 |
|
| SAFETY | ||||||||
| SAFETY | 32 |
|
9 |
|
28 |
|
28 |
|
| COMBINED | ||||||||
| COMBINED | 5 |
|
44 |
|
57 |
|
8 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 59 (better than 59% compared with alternatives), Rentokil Initial shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Rentokil Initial. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 78% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 47 which means that the stock price compared with what market professionals expect for future profits is higher than 53% of comparable companies, indicating a low value concerning Rentokil Initial's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 41 which means that the stock price compared with what market professionals expect for future profit levels is higher than 59% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 46 is also low. Compared with invested capital, the stock price is higher than for 54% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 59, is a buy recommendation based on Rentokil Initial's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Rentokil Initial? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Rentokil Initial only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more
| VALUE METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| PRICE VS. REVENUES (P/S) | ||||||||
| PRICE VS. REVENUES (P/S) | 20 |
|
76 |
|
61 |
|
47 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 40 |
|
49 |
|
53 |
|
41 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 2 |
|
43 |
|
61 |
|
46 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 54 |
|
85 |
|
85 |
|
78 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 7 |
|
97 |
|
86 |
|
59 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 17 (better than 17% compared with alternatives), Rentokil Initial shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for Rentokil Initial. Sales Growth has a rank of 14, which means that currently professionals expect the company to grow less than 86% of its competitors. The same is valid for Profit Growth, with a rank of 19, and Capital Growth with 44. In addition, Stock Returns have a below market rank of 37, which means that the stock returns have recently been below 63% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 17, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is low here. ...read more
| GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 35 |
|
8 |
|
21 |
|
14 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 77 |
|
24 |
|
65 |
|
19 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
82 |
|
50 |
|
44 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 54 |
|
69 |
|
27 |
|
37 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 48 |
|
35 |
|
42 |
|
17 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 28 (better than 28% compared with alternatives), the company Rentokil Initial has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Rentokil Initial is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Rentokil Initial. Liquidity is at 58, meaning the company generates more profit to service its debt than 58% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 24, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 76% of its competitors. Leverage is also high at a rank of 24, which means that the company has an above-average debt-to-equity ratio. It has more debt than 76% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 28 (worse than 72% compared with alternatives), Rentokil Initial has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more
| SAFETY METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 51 |
|
3 |
|
16 |
|
24 |
|
| REFINANCING | ||||||||
| REFINANCING | 22 |
|
16 |
|
34 |
|
24 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 45 |
|
57 |
|
62 |
|
58 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 32 |
|
9 |
|
28 |
|
28 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
37 |
|
42 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
50 |
|
31 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
43 |
|
70 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
47 |
|
62 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
30 |
|
58 |
|
new |
|
Free stock analysis by the purely fact based Obermatt Method for Rentokil Initial from November 14, 2024.
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