ROL Rollins, Inc.
The Orkin compounder: essential, recurring, superbly run — finally at a fair price.
The business
Rollins is the parent of Orkin and a fleet of regional brands providing recurring pest and termite control to residential and commercial customers, plus wildlife services. It makes money on subscription-like service contracts with high repeat rates, and compounds growth by acquiring hundreds of small family-owned pest control operators. Demand is non-discretionary, recession-resistant, and boring in the best way.
Quality gate · 93/100
Moat & management
| Moat | wide moat |
| Source | brand |
| Trajectory | stable |
| Management | excellent |
Orkin's century-old brand plus national-route density creates a cost and trust advantage in a fragmented industry; commercial national accounts and residential repeat behavior add stickiness. As the industry's most prolific consolidator, each acquisition densifies routes and reinforces scale. Pests are not being disrupted; climate trends arguably increase demand.
Decades of disciplined tuck-in M&A at attractive returns, FCF conversion above 100%, modest leverage at ~1x EBITDA, uninterrupted dividend growth, and a slight share-count reduction. The founding Rollins family's large ownership keeps incentives owner-aligned.
Owner-earnings inputs
| Owner earnings (TTM) | 619.17M |
| Owner-earnings yield | 3.8% |
| Free-cash-flow yield | 3.8% |
| Growth used (normalized) | 8.0% |
| Market-implied growth (reverse DCF) | 10.3% |
| Terminal growth | 3.0% |
| Discount rate (hurdle) | 9.0% |
Projected owner earnings
| Yr | Owner earnings | Growth | PV |
|---|---|---|---|
| 1 | 668.70M | 8.0% | 613.49M |
| 2 | 719.81M | 7.6% | 605.85M |
| 3 | 772.25M | 7.3% | 596.32M |
| 4 | 825.76M | 6.9% | 584.99M |
| 5 | 880.02M | 6.6% | 571.96M |
| 6 | 934.71M | 6.2% | 557.34M |
| 7 | 989.46M | 5.9% | 541.27M |
| 8 | 1.04B | 5.5% | 523.89M |
| 9 | 1.10B | 5.1% | 505.35M |
| 10 | 1.15B | 4.8% | 485.81M |
| 11 | 1.20B | 4.4% | 465.44M |
| 12 | 1.25B | 4.1% | 444.39M |
| 13 | 1.30B | 3.7% | 422.84M |
| 14 | 1.34B | 3.4% | 400.95M |
| 15 | 1.38B | 3.0% | 378.88M |
Key risks
- Recent growth leaned heavily on post-COVID price increases; volume softness and pricing fatigue could drag organic growth to mid-single digits
- Premium multiple leaves no cushion if growth normalizes below expectations
- Rentokil-Terminix scale and commercial pricing competition; family control concentrates governance power
Catalysts
- Continued consolidation of a fragmented industry at high incremental returns
- Operating-margin expansion from routing technology, digital sales, and Fox Pest integration
- Re-rating once organic growth re-accelerates toward historical 7-8%
Recent news
score · 8 articles
- 5 Dividend Stocks Hiding in Boring Businesses Customers Cannot Live Without
- These 5 Boring Stocks Are Quietly Crushing the Market and Making Investors Rich
- 1 Mid-Cap Stock with Exciting Potential and 2 We Ignore
- 1 of Wall Street’s Favorite Stocks with Solid Fundamentals and 2 Facing Headwinds
- 2 Reasons to Like ROL and 1 to Stay Skeptical
- 1 Stock Under $50 to Consider Right Now and 2 We Question
- Why Is Rollins (ROL) Down 7.8% Since Last Earnings Report?
- Coherent After a Record FY26: Is the Stock a Buy After Q4 Earnings?
⚠ maintenance capex ≈ min(capex, D&A), capped at FCF · Price pays for ~10%/yr owner-earnings growth over 15y (reverse DCF); model credits 8%. · Rich vs our conservative value, but a quality business is not a short — stance is WAIT for a better price, not sell.