Nobody Cancels This Income: Rollins, Rentokil and Ecolab
Pest control and sanitation contracts renew whether markets cooperate or not, yet two of the three companies discussed here have lost nearly half their value this year while their customers keep paying. The business case and the share price are…
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Pests, grease traps and scale in cooling towers come back on their own schedule, so the companies that handle them sell service on a route and bill on a calendar. The global pest control market grew from $15.4 billion in 2015 to $29.0 billion in 2025, a 6.6% compound annual rate, in a category Rentokil’s own filing describes as “resilient and non-cyclical.” That durability shows up in the revenue line more reliably than in the share price. Two of the three names below are down sharply this year while their customers keep renewing.
Rollins: Pest Control Routes Where Retention Held Through a Rough Quarter
Rollins (NYSE:ROL | ROL Price Prediction) is the Atlanta-based parent of Orkin, HomeTeam Pest Defense, Fox Pest Control, Western Pest Services and roughly 20 regional brands. It sends technicians on scheduled visits to homes and businesses. Second-quarter revenue came to $1.08B, up 7.9%, split among residential ($485.8M), commercial ($347.9M) and termite and other work ($234.2M).
The customer keeps paying because the contract is for prevention. Chief executive Jerry Gahlhoff told analysts there were “no notable shifts or deterioration in customer retention trends” and that “customer response to our recent price increase has been favorable.” The weakness sat in one-time jobs, which management said “went negative throughout a large part of the quarter,” while “the recurring has been healthier.” That split is the contract thesis in miniature. Gross margin was 52.8%, down 100 basis points, which still leaves a wide buffer for a route business.
On downturns, Rollins kept paying through the financial crisis, with the quarterly dividend largely at $0.07 across the 2009 to 2011 payments. Its quarterly record stretches back to at least February 1999. The payout rose from $0.08 in 2021 to $0.1825 beginning in November 2025, and it held there through the second-quarter miss. The annualized $0.73 is modest. Over ten years the shares returned 165.77%.
Risk: the front of the pipeline. Adjusted EPS of $0.32 missed the $0.34 consensus as consumer-initiated residential leads (search, digital, inbound calls) moderated, and operating margin contracted 110 bps to 18.7%. The stock has fallen 49.39% year to date, to $30.04, and it underperformed competitors on Thursday. Gahlhoff compared the stretch to 2017: “It was a pretty painful Q2, but we came right out of it in Q3.” The third-quarter report will show whether that pattern repeats.
Rentokil: Global Pest Control With a Currency Layer for US Holders
Rentokil (NYSE:RTO) runs the same route model across roughly 90 countries, including Terminix in the US. Pest control is the large majority of the group: first-half revenue of $3.589B included $2.968B from pest control and $621M from hygiene and wellbeing.
Customers stayed and paid more. Retention improved to 80.7% domestically and 86.1% internationally, and the company says pricing remains ahead of inflation. Organic revenue grew 3.6%, adjusted operating profit rose 6.6% at constant currency to $556M, and free cash flow conversion improved to 95.7% from 92.6%.
How the Dividend Reaches a US Account
Rentokil is dual listed, and US investors typically hold American depositary receipts. The company declared an interim dividend of 4.48 cents per ordinary share on July 30, 2026, up 8.0% under its progressive policy, paid September 21. The ADR payment of $0.224 per ADR arrived on September 22, routed through the depositary. Payments come twice a year, and past ADR amounts carry unusual decimals, such as $0.273817 in August 2025, a sign of conversion from a non-dollar amount. The latest per-ADR figure also sits below that prior-year interim payment despite the headline increase, so the declared dividend and what lands in a US brokerage account do not move in together. Timing, amount and any depositary charges can differ from the London payment.
Returns have been uneven: 63.39% over ten years, but down 44.95% over five and 28.41% this year. Shares fell as much as 17% after new CEO Mike Duffy retired the North America 20% margin target for 2027 in favor of volume growth.
Risk: termite claims. An additional $47M provision brought total termite damage liability to $392M. Litigated claim rates rose 11% during the first six months and non-litigated claims rose 6%. That liability comes with the Terminix book, and it grows on its own schedule.
Ecolab: A Water and Hygiene Company Where Pest Elimination Is One Segment
Ecolab (NYSE:ECL) belongs here for its contracts. The St. Paul company sells water treatment, cleaning and sanitation, and infection prevention programs, with technicians visiting kitchens, food plants, hospitals and factories. Second-quarter revenue of $4.415B broke down into Global Water ($2.223B), Institutional and Specialty ($1.621B), Pest Elimination ($351.1M), Life Sciences ($220.1M) and Ecolab Digital ($121M).
Ecolab rolled out a global energy surcharge in the first quarter, pricing contributed 4% in the second quarter, and management expects 5%-6% in the second half. CEO Christophe Beck said retention stayed “super stable” and that “we never give the pricing back in our model.” First-quarter adjusted operating margin expanded 70 bps to 16.7%. Institutional and Specialty grew 4% while US restaurant traffic was down 5% year over year.
Through the 2020 pandemic, when its restaurant and hotel customers took the hardest hit, Ecolab held its quarterly dividend at $0.47 and raised it to $0.48 in December 2020. The payout has stepped up every year in the listed history, from $0.37 in late 2016 to $0.73 in December 2025 (that kind of multi-decade raise streak is exactly what we screened for with the Dividend Kings report). The shares returned 159.71% over ten years and are up 7.32% this year. Full-year adjusted EPS guidance was raised to $8.05-$8.25.
Risk: input costs and a changing mix. Rising commodity costs are squeezing gross margins, Middle East disruptions created a roughly 1% volume drag, and CoolIT acquisition costs weigh on near-term EPS. The fastest growth now comes from data center and semiconductor customers (Global High-Tech rose 29% organically), a corner that acts differently from a restaurant’s weekly dish machine service.
What Keeps These Contracts Renewing
Pests, dirty kitchens and cooling-tower scale will be around next year too. The contracts that handle them renew quietly, even in a year when two of these share prices have fallen. The numbers worth checking each quarter are retention and pricing, and all three companies currently report both holding up.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
