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Rentokil InitialRTO +0.33%88 Forward Rate of Return (Yacktman) % is 8.12% as of Dec. 2025, which is 28% above its 10-year median of 6.35. GuruFocus rates RTO with a GF Score™ of 88/100 and a GF Value™ of $32.83 (Modestly Undervalued). The stock has 6 warning signs investors should review. Among 718 Business Services companies, Rentokil Initial ranks worse than 61.7% on this metric.
Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. Rentokil Initial's forward rate of return for was 8.12%.
The historical rank and industry rank for Rentokil Initial's Forward Rate of Return (Yacktman) % or its related term are showing as below:
RTO'
s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: -5.98 Med: 6.35 Max: 24.12
Current: 9.23
During the past 13 years, Rentokil Initial's highest Forward Rate of Return was 24.12. The lowest was -5.98. And the median was 6.35.
RTO's Forward Rate of Return (Yacktman) % is ranked worse than 61.7% of 718
companies
in the Business Services industry
Industry Median: 13.395
vs RTO: 9.23
Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
Rentokil Initial (NYSE:RTO) Forward Rate of Return (Yacktman) % Explanation
Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.
Be Aware
In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.
Rentokil Initial Forward Rate of Return (Yacktman) % Related Terms
Rentokil Initial Forward Rate of Return (Yacktman) % Historical Data
* Premium members only.
The historical data trend for Rentokil Initial's Forward Rate of Return (Yacktman) % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Rentokil Initial Forward Rate of Return (Yacktman) % Chart
RTO vs CTAS, CPRT, GPN: Forward Rate of Return (Yacktman) % Comparison
For the Specialty Business Services subindustry, Rentokil Initial's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Rentokil Initial Forward Rate of Return (Yacktman) % vs Business Services Industry
For the Business Services industry and Industrials sector, Rentokil Initial's Forward Rate of Return (Yacktman) % distribution charts can be found below:
* The bar in red indicates where Rentokil Initial's Forward Rate of Return (Yacktman) % falls into.
Rentokil Initial Forward Rate of Return (Yacktman) % Calculation
Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):
If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.
The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
What does a Forward Rate of Return (Yacktman) % of 8.12% mean?
Rentokil Initial (RTO) has a Forward Rate of Return (Yacktman) % of 8.12% as of Dec. 2025. Yacktman's forward rate of return equals the sum of normalized free-cash-flow yield plus earnings growth. View historical data on Rentokil Initial and its competitors. This is 28% above median its historical median of 6.35. According to the industry distribution chart, Rentokil Initial ranks #443 out of 718 companies in the Business Services industry, placing it in the top 61.7%.
Is Rentokil Initial's Forward Rate of Return (Yacktman) % too high?
Rentokil Initial's current Forward Rate of Return (Yacktman) % of 8.12% is 28% above median its 10-year median of 6.35. The Business Services industry median Forward Rate of Return (Yacktman) % is 13.40. Rentokil Initial's value of 8.12% is 39.4% below this industry median. Based on the distribution chart, Rentokil Initial ranks #443 out of 718 companies in the Business Services industry, which is below the industry midpoint. Overall, Rentokil Initial has a GF Score™ of 88/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Rentokil Initial's Forward Rate of Return (Yacktman) % compare to CTAS and CPRT?
According to the Business Services industry distribution chart, Rentokil Initial ranks #443 out of 718 companies for Forward Rate of Return (Yacktman) %. This places Rentokil Initial in the lower half of its industry. The industry median Forward Rate of Return (Yacktman) % is 13.40. Rentokil Initial's value of 8.12% is 39.4% below this benchmark. While the company's 10-year median is 6.35 vs. the industry median of 13.40, Rentokil Initial has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Forward Rate of Return (Yacktman) % for a Business Services company?
The median Forward Rate of Return (Yacktman) % among Business Services companies is 13.40, based on 718 companies in the industry. Companies in the top quartile (top 25%) have a Forward Rate of Return (Yacktman) % significantly above this median, while those in the bottom quartile fall well below. However, Forward Rate of Return (Yacktman) % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Rentokil Initial's current Forward Rate of Return (Yacktman) % of 8.12% is 39.4% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Forward Rate of Return (Yacktman) % mean?
A high Forward Rate of Return (Yacktman) % can signal that a stock is expensive relative to its fundamentals. Yacktman's forward rate of return equals the sum of normalized free-cash-flow yield plus earnings growth. View historical data on Rentokil Initial and its competitors. For the Business Services industry, the median Forward Rate of Return (Yacktman) % is 13.40 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Rentokil Initial's current Forward Rate of Return (Yacktman) % is 8.12%, which is 28% above median its own 10-year median of 6.35. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Rentokil Initial stock overvalued right now?
Based on GuruFocus' analysis, Rentokil Initial (RTO) is currently considered Modestly Undervalued. The stock's GF Value™ is $32.83, compared to a current price of $24.29 — trading 26% below its estimated fair value. The current Forward Rate of Return (Yacktman) % is 8.12%, which is 28% above median its 10-year median of 6.35 and 39.4% below the Business Services industry median of 13.40. Rentokil Initial's overall GF Score™ is 88/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Forward Rate of Return (Yacktman) % calculated?
Forward Rate of Return (Yacktman) % is calculated from a company's financial statements. For Rentokil Initial (RTO), the current Forward Rate of Return (Yacktman) % is 8.12% as of Dec. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Rentokil Initial (RTO) Overvalued in 2026?
Based on GuruFocus' analysis, Rentokil Initial stock appears to be undervalued.
The current stock price of $24.29 is trading 26% below its estimated GF Value™ of $32.83.
GuruFocus considers Rentokil Initial to be Modestly Undervalued.
Key valuation signals for RTO:
Forward Rate of Return (Yacktman) %: 8.12% (28% above median its 10-year median of 6.35)
GF Value™: $32.83 vs. price of $24.29 (26% below fair value)
Industry Position: 39.4% below the Business Services median (#443 of 718)
No single metric tells the full story. See the RTO stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Rentokil Initial is the largest global provider of route-based pest control and commercial hygiene services, operating in over 90 countries, with its largest operations in the United States following the acquisition of Terminix. The group also offers a range of specialist route-based services, including office and commercial space plant care, property care, and workwear rentals. The group serves a diverse client base of global food producers, hotel chains, industrial goods companies, restaurants, and individual residential customers.
88GF Score
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