Pest control is the ultimate AI-immune business. At the end of 2022, EV was $18B, EPS $0.75, FCF $435MM. Today, $19.6B EV, $1.14 EPS, $650FCF.
I have always struggled with the low absolute FCF yield on ROL (currently 3.3% which is at the higher end historically). This is explained by the incredible stickiness of the business and competitive landscape. Most of the competition is local small business pest control firms. Rentokil is the international competitor (and it is getting smoked today which is why I looked at Rollins).
ROL is well-managed. Long-term financial and stock performance is up and to the right steadily. Big corrections like this year have ALWAYS been buying opportunities although it is hard to see that in the stock charts due to 3-2 stock splits recurring every 2-5 years (2010, 2015, 2018, 2020...).
Debt has been increasing but is hardly at concerning levels. Financial reporting shows that the company is buying in the minority interests of its joint venture operations globally. ROE is rising as a result.