Doubled since 2022, covered twice over by free cash flow, and barely levered. Rollins pays $0.20 a quarter from December 2026, $0.80 annualized, declared October 20, 2026, up 10% from $0.1825 a year earlier; the regular rate has doubled since the beginning of 2022. Dividends of $264 million are 53% of 2025 free cash flow of $496 million, a pass, and net debt is about 0.5x EBITDA, a pass. No caution applies on any check, so the card grades good.
Key risk: Growth comes from acquisitions and route density; a bad acquisition or a commercial-spending downturn would slow the earnings growth that funds the raises.
Changes if: Free-cash-flow payout crosses 60%, leverage passes 3x, or the raise streak breaks.
- ✓Cash-flow cover 53.2% of FY2025 free cash flow, pass (<60%).
- ✓Leverage 0.5x net debt/EBITDA, pass (<3x).
- ✓Dividend history Raised every year; doubled since the beginning of 2022; no cut.
- ✓Trap screen Yield 2.18%, payout under 100%, no cut; not a trap pattern.
What this grade doesn't say: It screens the dividend only — covered, real, compounding. It says nothing about valuation or price: a well-covered payer can still be overpriced, and its price can still fall.