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When Rollins, Inc.'s (NYSE:ROL) announced its latest earnings (31 March 2019), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Rollins's average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not ROL actually performed well. Below is a quick commentary on how I see ROL has performed.
Check out our latest analysis for Rollins
Did ROL beat its long-term earnings growth trend and its industry?
ROL's trailing twelve-month earnings (from 31 March 2019) of US$227m has jumped 21% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 11%, indicating the rate at which ROL is growing has accelerated. How has it been able to do this? Let's see if it is merely owing to an industry uplift, or if Rollins has seen some company-specific growth.
In terms of returns from investment, Rollins has invested its equity funds well leading to a 32% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 18% exceeds the US Commercial Services industry of 6.6%, indicating Rollins has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Rollins’s debt level, has declined over the past 3 years from 40% to 33%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Rollins gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Rollins to get a more holistic view of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for ROL’s future growth? Take a look at our free research report of analyst consensus for ROL’s outlook.
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Financial Health: Are ROL’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
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Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.