For those looking to find strong Business Services stocks, it is prudent to search for companies in the group that are outperforming their peers. Rentokil Initial PLC (RTO) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? By taking a look at the stock's year-to-date performance in comparison to its Business Services peers, we might be able to answer that question.
Rentokil Initial PLC is one of 259 companies in the Business Services group. The Business Services group currently sits at #6 within the Zacks Sector Rank. The Zacks Sector Rank includes 16 different groups and is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors.
The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. Rentokil Initial PLC is currently sporting a Zacks Rank of #2 (Buy).
Over the past 90 days, the Zacks Consensus Estimate for RTO's full-year earnings has moved 0.3% higher. This means that analyst sentiment is stronger and the stock's earnings outlook is improving.
Based on the most recent data, RTO has returned 8.1% so far this year. Meanwhile, stocks in the Business Services group have lost about 8.3% on average. As we can see, Rentokil Initial PLC is performing better than its sector in the calendar year.
One other Business Services stock that has outperformed the sector so far this year is SGS SA (SGSOY). The stock is up 13.4% year-to-date.
In SGS SA's case, the consensus EPS estimate for the current year increased 1.1% over the past three months. The stock currently has a Zacks Rank #2 (Buy).
Breaking things down more, Rentokil Initial PLC is a member of the Business - Services industry, which includes 27 individual companies and currently sits at #83 in the Zacks Industry Rank. On average, stocks in this group have lost 10.2% this year, meaning that RTO is performing better in terms of year-to-date returns. SGS SA is also part of the same industry.
Going forward, investors interested in Business Services stocks should continue to pay close attention to Rentokil Initial PLC and SGS SA as they could maintain their solid performance.
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Rentokil Initial PLC (RTO): Free Stock Analysis Report SGS SA (SGSOY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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