Head-To-Head Review: ABM Industries (NYSE:ABM) versus Rollins (NYSE:ROL)

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

Analyst Recommendations

This is a breakdown of recent ratings for Rollins and ABM Industries, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rollins	3	11	3	1	2.11
ABM Industries	0	3	2	0	2.40

Rollins currently has a consensus target price of $39.25, indicating a potential upside of 3.40%. ABM Industries has a consensus target price of $50.88, indicating a potential downside of 3.73%. Given Rollins’ higher probable upside, analysts clearly believe Rollins is more favorable than ABM Industries.

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%

Volatility & Risk

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

Dividends

Rollins pays an annual dividend of $0.73 per share and has a dividend yield of 1.9%. ABM Industries pays an annual dividend of $1.16 per share and has a dividend yield of 2.2%. Rollins pays out 67.0% 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 raised its dividend for 4 consecutive years and ABM Industries has raised 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.

Institutional & 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 company insiders. Comparatively, 0.9% of ABM Industries shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rollins	$3.76 billion	4.83	$526.71 million	$1.09	34.83
ABM Industries	$9.15 billion	0.34	$162.30 million	$2.77	19.08

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.

Summary

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

About Rollins

Rollins, Inc., through its subsidiaries, provides pest and wildlife control services to residential and commercial customers in the United States and internationally. The company offers pest control services to residential properties protecting from common pests, including rodents, insects, and wildlife. It also provides workplace pest control solutions for customers across various end markets, such as healthcare, foodservice, and logistics. In addition, the company offers termite protection services and ancillary services. It serves clients directly, as well as through franchisee operations. The company was formerly known as Rollins Broadcasting, Inc and changed its name to Rollins, Inc. in 1965. Rollins, Inc. was founded in 1901 and is headquartered in Atlanta, Georgia.

About ABM Industries

ABM Industries Incorporated, through its subsidiaries, engages in the provision of integrated facility, infrastructure, and mobility solutions in the United States and internationally. It operates through Business & Industry, Manufacturing & Distribution, Education, Aviation, and Technical Solutions segments. The company offers janitorial, facilities engineering, and parking services for commercial real estate properties, including corporate offices for high tech clients, sports and entertainment venues, and traditional hospitals and non-acute healthcare facilities; provides vehicle maintenance and other services to rental car providers. It also offers integrated facility services, engineering, and other specialized services in various types of manufacturing, distribution, and data center facilities. In addition, the company delivers custodial and landscaping and grounds for public school districts, private schools, colleges, and universities. Further, it supports airlines and airports with services comprising passenger assistance, catering logistics, air cabin maintenance, and transportation services. Additionally, the company provides electric vehicle power design, installation, and maintenance, as well as microgrid systems installations. ABM Industries Incorporated was founded in 1909 and is headquartered in New York, New York.