We’re in the thick of annual report season and today I skimmed through the report of the most boring company in my portfolio. It is…drum roll…Rollins.
Huh? Who? Yup, that’s right. Rollins, Inc.
Rollins deals with bugs, mice, termites and other pests. Reading about Rollins is about as dull as it gets. I love this paragraph from an analyst’s report on Rollins.
You won’t see that kind of info in the Amazon, Apple or Netflix report.
How Is Rollins Doing?
Not too bad. Growth is up in all 3 business segments, Operating cash flow is up, and earnings and income are up. Up is good.
My Experience
I came across Rollins in 2017. While I get excited to read about Apple, Amazon and Netflix and their expansion and new products, I also have some really boring businesses that have done well for me. Waste Management is a great example. Who wants to read about trash? But, we all have some and we need it taken away every week. Pretty good business.
Same for Rollins. Pests are everywhere. Someone needs to take care of them.
I liked what I read, and bought a few shares in 2017. While it’s not the 600% gain that I got on the Mercardo Libre (the Amazon of Latin America) shares that I bought around the same time, it’s pretty respectable. And it’s beaten the S&P 500 by 36.8%.
Rollins also pays a 1.24% dividend. I reinvest my dividends. I bought 225 shares in 2017. I have 247.29 now. That means that over the past 8 years, I’ve gotten 22 shares from dividend repurchases . At today’s price of $53.22, that dividend is worth $1,170.84.
Get Rich Slow
Let’s look at this in more detail. The company is boring, the growth pales in comparison to Apple, Amazon, Netflix and Mercardo Libre, so why own it?
Let’s look at the actual details from my brokerage website to see the magic of slow growth.
I bought 225 shares on October 5 of 2017 for $20.53 per share. It cost me $4,615.94.
Then I went on with my life.
Every quarter, Rollins paid a small dividend – you can see my first one was $25.73. Rather than taking the cash and treating myself to a nice breakfast, I reinvested. My broker bought me 0.485 additional shares. Big Deal!
It Is A Big Deal
That fractional share cost $10 (0.485 shares x $20.62) in 2017.
At today’s price, it is worth (0.485 shares x $53.22 = $25.81). About $15 more. That’s a gain of (15/10 = 150%). And I’m not doing this one time, it happens automatically every quarter.
And the nice folks at Rollins often pay a special dividend, so sometimes you’ll see 2 payments in December.
So my cost was $4,615.94 in 2017. I walked away, and in 2025, the value after price appreciation and many quarters of dividend reinvestment is $13,116.55.
My investment total gain is ($13,116.55 – $4,615.94 = $8,500.61). $8,500.61 gain / my initial investment of $4,615.94 = 184%.
So the price has increased 160%, but the total return with dividends reinvested is 184%.
Wrap-Up
Rollins is a boring company. Pest Control – Snooze.
But boring companies can add some stability while providing solid long-term returns.
The $8,500 gain over 8 years doesn’t make me rich. It’s nice though. It’s real money. I could take it out and go on a nice vacation. But, I’ll probably let it run and see where I’m at 10 years from now. Or 20.
We’d all love to be a bitcoin millionaire – doubling our money in a week or a month. But the reality is that there are a lot more folks who have lost their shirts on risky investments than those who have won. Those who have won just do better marketing. Check out YouTube.
I doubled my money almost 2 times (1.84 times) on Rollins. It only took me 8 years.
But I didn’t have to do anything. I didn’t kill any termites. I did my research, made an investment, monitored results against my thesis. Read an annual report or 2, and Bob’s your uncle.
Do this a few times and add in a nice low-cost S&P 500 fund or ETF and wait. You won’t be rich tomorrow, but 7,8,10,20,30 years down the road, you’ll be amazed at the wealth you’ve accumulated.
Just ask Sylvia.