Rollins (NYSE:ROL) versus ABM Industries (NYSE:ABM) Critical Survey

Rollins (NYSE:ROL) and ABM Industries (NYSE:ABM) are both industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, profitability, institutional ownership, dividends and risk.

Volatility & Risk

Rollins has a beta of 0.73, indicating that its share price is 27% less volatile than the S&P 500. Comparatively, ABM Industries has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500.

Valuation & Earnings

This table compares Rollins and ABM Industries”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rollins	$3.76 billion	4.82	$526.71 million	$1.09	34.82
ABM Industries	$8.75 billion	0.37	$162.30 million	$2.77	19.73

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.

Institutional and Insider Ownership

51.8% of Rollins shares are held by institutional investors. Comparatively, 91.6% of ABM Industries shares are held by institutional investors. 5.8% of Rollins shares are held by insiders. Comparatively, 0.9% of ABM Industries shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Rollins and ABM Industries, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rollins	3	10	4	1	2.17
ABM Industries	0	3	2	0	2.40

Rollins presently has a consensus price target of $40.56, indicating a potential upside of 6.88%. ABM Industries has a consensus price target of $50.88, indicating a potential downside of 6.89%. Given Rollins’ higher probable upside, analysts clearly believe Rollins is more favorable than ABM Industries.

Dividends

Rollins pays an annual dividend of $0.80 per share and has a dividend yield of 2.1%. ABM Industries pays an annual dividend of $1.16 per share and has a dividend yield of 2.1%. Rollins pays out 73.4% of its earnings in the form of a dividend. ABM Industries pays out 41.9% 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 4 consecutive years and ABM Industries has increased its dividend for 59 consecutive years. ABM Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Rollins and ABM Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rollins	13.19%	39.43%	16.89%
ABM Industries	1.82%	12.46%	4.03%

Summary

Rollins beats ABM Industries on 11 of the 18 factors compared between the two stocks.

About Rollins

Rollins, Inc. is a global provider of pest and termite control services for residential and commercial customers. Its services include inspections, prevention and treatment for common household and business pests, as well as termite protection, mosquito control and wildlife removal. The company operates through brands including Orkin, HomeTeam Pest Defense and Clark Pest Control. Founded in 1948, Rollins expanded into pest control with its 1964 acquisition of Orkin, which remains one of its best-known brands.

About ABM Industries

ABM Industries provides facility, infrastructure and building maintenance services to commercial, industrial and institutional customers. Its offerings include janitorial and custodial services, facility engineering and maintenance, parking and transportation services, and electrical and energy solutions. The company serves a range of sectors, including commercial real estate, aviation, education, healthcare, manufacturing and distribution. Its services are delivered primarily across the United States, with operations in select international markets.