Animal Sector

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Rollins - >>> 2 Stocks I'm Never Selling

It's the only way to take advantage of what makes each of these businesses special.


Motley Fool

by Jason Hawthorne


https://www.fool.com/investing/2021/07/21/2-stocks-im-never-selling/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


Rollins


Rollins can trace its roots back to a small pest control business in the late 19th century. These days, it has 2.8 million customers across 900 locations worldwide. The last few decades have proven that getting rid of unwanted pests and wildlife is not something people cut back on even when the economy struggles. Rollins has seen 23 consecutive years of revenue growth and has averaged 20% annual earnings growth over the past two decades. That's not likely to change.

The company has a pristine financial profile, with immense cash generation and little debt. But what convinces me to hold for the next few decades is the impact a warming climate will have on the pests Rollins makes its money removing. A few examples prove the point.

Cockroaches love the hot humid air during summer. It's their breeding season. As the temperatures rise, they also get more active. In fact, they even cover more territory. Although they don't move much when it's cold, they begin to walk and run when it heats up. Real migration can happen when the temperature climbs above 100 degrees Fahrenheit -- they take flight. If you are expecting dry conditions to stand in the way of their progress, think again. Unlike humans, they can hold their breath for 40 minutes at a time in arid conditions to prevent dehydration.

Warmer winters and hotter summers also provide a great breeding environment for rats. With a gestation period of only 14 days, and an ability to start reproducing at only one month old, one pregnant rat can lead to more than 15,000 babies in a year. That's both impressive and disgusting. With global temperatures rising, rats brazenly meandering towns and cities like they did during the COVID lockdowns could become more prevalent.

Another result of rising temperatures has been an increase in mosquito-borne illnesses. Scientists believe over the next 30 years, the bloodsuckers will expand their territory to reach half of the world's population. Recent data suggests various species are spreading north at about 37 miles-per-year in the U.S. and 93 miles-per-year in Europe. Although there are multiple factors behind the migration, it all adds up to an expanded opportunity for Rollins. It's a change that will occur over the next 30 years. For me, it's a good reason to hold shares and never sell.

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