Rollins, Inc. : ROL-US: Dividend Analysis : November 10th, 2017 (record date) : By the numbers : November 13, 2017

Our analysis is based on comparing Rollins, Inc. with the following peers – Ecolab Inc., Cintas Corporation, Healthcare Services Group, Inc., ABM Industries Incorporated, UniFirst Corporation, Lime Energy Co., Ameresco, Inc. Class A,, Inc. and Rentokil Initial plc Sponsored ADR (ECL-US, CTAS-US, HCSG-US, ABM-US, UNF-US, LIME-US, AMRC-US, SPRT-US and RTOKY-US).

Rollins, Inc.’s dividend yield is 1.24 percent and its dividend payout is 52.98 percent. This compares to a peer median dividend yield of 1.12 percent and a payout level of 32.38 percent. This type of dividend performance might make it a good stock for dividend investors. However, the company’s average dividend quality score of 42 out of a possible score of 100, points to some weakness in the sustainability of its robust payout ratio, and makes its less attractive for dividend investors seeking current income.

Dividend Yield
Dividend Quality Score

Dividend Quality Overview

  • Over the last twelve months (prior to September 30, 2017), ROL-US paid a low quality dividend, which represents a yield of 0.99% at the current price.
  • Dividends paid during each of the last five years were consistently of high quality.
  • The ending cash balance is less than the last full year dividend payment and cannot be relied on to cushion any significant reduction of cash flows in the future.
Dividend Quality Score Vs Dividend Yield

Quadrant label definitions. Hover to know more

High Score;High Yield, High Score;Low Yield, Low Score;Low Yield, Low Score;High Yield

Dividend Coverage

Over the last twelve months (prior to September 30, 2017), ROL-US paid a low quality dividend.

The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 2.17x), investing cash flow (coverage of -1.30x), issuance cash flow (coverage of -0.07x) and twelve-month prior cash (coverage of 1.17x), for a total dividend coverage of 1.96x.

ROL-US’s issuance cash flow includes outflows from net share buybacks (coverage of -0.07x). Thus, the total coverage including share buybacks is 2.02x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.

Dividend Coverage by Cash Flow (TTM)

These coverage ratio factors imply that the firm had to dip into the beginning cash balance to pay the dividend, which suggests a low dividend quality.

Dividend History

Item 2012-12-31 2013-12-31 2014-12-31 2015-12-31 2016-12-31 Latest
Dividend Yield (%) 2 1.49 1.57 1.62 1.48 1.24
Dividend Payout (%) 42.1 42.86 44.68 45.71 51.95 52.98

A complete list of metrics and analysis is available on the company page.

Company Profile

Rollins, Inc. is an international service company, which engages in the provision of pest and termite control services through its wholly-owned subsidiaries to both residential and commercial customers in North America, Australia, and Europe. Its subsidiaries includes Orkin, LLC, Orkin Canada, Western Pest Services, The Industrial Fumigant Company, HomeTeam Pest Defense, Rollins Australia, Rollins Wildlife Services, and Rollins UK. The company was founded by John W. Rollins and O. Wayne Rollins Sr. in 1948 and is headquartered in Atlanta, GA.


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