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Why Rollins Jumped 24% in July

By Rich Duprey – Aug 7, 2020 at 1:23PM

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Pest control isn't a service consumers are easily willing to cancel, even during a pandemic.

What happened

Shares of Rollins (ROL -0.43%) soared 23.6% in July, according to data provided by S&P Global Market Intelligence, as the pest control specialist remained on the upward trajectory it's been on all year.

So what

Although people hunkered down during the coronavirus pandemic and focused on buying just the necessities, ridding their homes of roaches, termites, ants, and other creepy crawlies was also apparently an essential service consumers weren't ready to discard.

Pest control technician spraying in cabinets

Image source: Getty Images.

As the earnings report it issued at the end of the month showed, Rollins' revenue increased 5.6% for the quarter with residential revenue jumping almost 15% year over year.

Now what

Rollins is also not letting up on its growth-by-acquisition strategy as it kicked off the month of July by announcing it was buying up the biggest independent pest control company in Australia, Adams Pest Control.

Rollins has a presence on six continents (pest control service on Antarctica isn't much of a necessity) where it serves 700 million customers through brands such as Orkin and Western Pest Services. It has grown to such a size by continuing its strategy of rolling up the industry under its umbrella, and is likely finding good deals during the pandemic.

Although its business was impacted by stay-at-home orders, which limited its commercial operations, in March it launched its VitalClean disinfectant service for businesses to sanitize and disinfect hard, nonporous surfaces. With businesses now reopening, Rollins should see gains from helping them meet their sanitization needs.

 

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Rollins. The Motley Fool has a disclosure policy.

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Rollins, Inc. Stock Quote
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