Dolby Laboratories (DLB) vs Rentokil Initial PLC (RTO)

Dolby Laboratories and Rentokil Initial PLC are both Specialty Business Services companies. Rentokil Initial PLC is the larger, with a market value of $10.3B against $5.4B — 1.9× the size. Dolby Laboratories trades at the lower P/E: 24.6× against 60.5×. Dolby Laboratories has the higher net margin (16.7% vs 7.17%) and the higher return on invested capital (8.06% vs 0.00%). Both pay a dividend; Rentokil Initial PLC yields more (1.96% vs 1.38%). Across the 19 metrics below, Dolby Laboratories leads on 13 and Rentokil Initial PLC on 6.

Valuation

Metric DLB RTO Specialty Business Services median
P/E 24.61 60.49 23.86
P/S 4.07 n/m 1.06
P/B 2.13 n/m 2.37
Price to free cash flow 15.28 n/m 16.54
EV/EBITDA 13.96 1.57 11.51
EV/Sales 3.53 0.32 1.51
Earnings yield 4.06% 1.65% 2.14%
Free cash flow yield 6.54% 0.00% 1.55%

Profitability

Metric DLB RTO Specialty Business Services median
Gross margin 87.61% 0.00% 35.31%
Operating margin 17.65% 0.00% 3.43%
Net margin 16.70% 7.17% 1.67%
Free cash flow margin 26.66% 0.00% 3.28%
Return on equity 8.69% 0.00% 0.58%
Return on assets 7.12% 0.00% 0.33%
Return on invested capital 8.06% 0.00% 0.65%

Growth

Metric DLB RTO Specialty Business Services median
Revenue growth (TTM) 0.55% — 6.04%
EPS growth (last fiscal year) (2.60%) 19.23% —
Revenue growth, 5-year CAGR 3.04% 13.76% 7.66%
Net income growth, 5-year CAGR 1.97% 14.46% 0.00%

Health

Metric DLB RTO Specialty Business Services median
Debt to equity 0.00 1.01 0.21
Current ratio 3.19 1.16 1.62
Net debt to EBITDA (2.18) 2.87 1.16

Dividend

Metric DLB RTO Specialty Business Services median
Dividend yield 1.38% 1.96% 1.61%
Payout ratio 0.47 — 0.00

Size

Metric DLB RTO Specialty Business Services median
Market cap 5.38b 10.34b 879.14m

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