Rollins (NYSE: ROL) and ABM Industries (NYSE:ABM) are both construction companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.
Risk & Volatility
Rollins has a beta of 0.22, suggesting that its stock price is 78% less volatile than the S&P 500. Comparatively, ABM Industries has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500.
Insider and Institutional Ownership
38.1% of Rollins shares are held by institutional investors. Comparatively, 98.5% of ABM Industries shares are held by institutional investors. 55.8% of Rollins shares are held by company insiders. Comparatively, 0.8% of ABM Industries shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
This is a breakdown of current recommendations and price targets for Rollins and ABM Industries, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Rollins currently has a consensus target price of $43.00, indicating a potential downside of 19.85%. ABM Industries has a consensus target price of $47.67, indicating a potential upside of 46.58%. Given ABM Industries’ stronger consensus rating and higher probable upside, analysts clearly believe ABM Industries is more favorable than Rollins.
Rollins pays an annual dividend of $0.56 per share and has a dividend yield of 1.0%. ABM Industries pays an annual dividend of $0.70 per share and has a dividend yield of 2.2%. Rollins pays out 64.4% of its earnings in the form of a dividend. ABM Industries pays out 40.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Rollins has increased its dividend for 14 consecutive years and ABM Industries has increased its dividend for 50 consecutive years. ABM Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares Rollins and ABM Industries’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Rollins||$1.67 billion||6.99||$179.12 million||$0.87||61.67|
|ABM Industries||$5.45 billion||0.39||$3.79 million||$1.75||18.58|
Rollins has higher earnings, but lower revenue than ABM Industries. ABM Industries is trading at a lower price-to-earnings ratio than Rollins, indicating that it is currently the more affordable of the two stocks.
This table compares Rollins and ABM Industries’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
ABM Industries beats Rollins on 9 of the 16 factors compared between the two stocks.
Rollins Company Profile
Rollins, Inc., through its subsidiaries, provides pest and termite control services to residential and commercial customers. It offers protection against termite damage, rodents, and insects to homes and businesses, including hotels, food service establishments, food manufacturers, retailers, and transportation companies. The company also provides pest management and sanitation services and products to the food and commodity industries; consulting services on border protection related to Australia's biosecurity program; and bird control and specialist services, as well as offers specialized services to mining, and oil and gas sectors. In addition, it offers mosquito control, wildlife services, lawn care, insulation, and HVAC services. It serves clients directly, as well as through franchisee operations in North America, Australia, Europe, Central America, the Caribbean, the Middle East, Asia, the Mediterranean, Africa, Canada, Australia, and Mexico. Rollins, Inc. was founded in 1948 and is headquartered in Atlanta, Georgia.
ABM Industries Company Profile
ABM Industries Incorporated provides integrated facility solutions in the United States and internationally. The company operates through five segments: Business & Industry, Aviation, Emerging Industries Group, Technical Solutions, and GCA Services. It offers janitorial, facilities engineering, parking, passenger assistance, catering, air cabin maintenance, transportation, and specialized mechanical and electrical services. The company also franchises engineering services under the Linc Service and TEGG brands through individual and area franchises. It serves commercial real estate properties, sports and entertainment venues, industrial and manufacturing sites, airlines and airports, educational institutions, and commercial facilities, as well as education, healthcare, and high tech industry groups. ABM Industries Incorporated was founded in 1909 and is headquartered in New York, New York.
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