Discounted Stock Keeps Raising Its Dividend

One S&P 500 stock has had a terrible 2026.

Its stock price is down almost 40%!

But now might be an excellent time to buy.

Rollins Inc. (ticker: ROL) isn’t a household name, but its brands are.

Rollins owns Orkin, the popular pest control service used by homes and businesses to prevent termites, bed bugs, rodents, and many other pests from ruining their properties.

As I mentioned earlier, 2026 has been awful for Rollins and its stock price.

Rollins’ stock price peaked in February, but has been on a steady decline ever since.

What’s the cause?

For 4 quarters in a row, Rollins has missed earnings estimates.

Wall Street hates being wrong, so analysts have been downgrading Rollins until they get it right.

But there’s more to it than earnings misses.

Artificial intelligence has hurt Rollins in an unexpected way.

Most homeowners don’t know the different pest control services in their area until they need them (usually in an emergency).

In the past, a quick Google search would provide options, with Orkin being near the top of the list.

But people are now using AI, and Rollins is finding customers are being steered towards more local pest control providers rather than its national brands.

Organic residential revenue growth, revenue from its existing residential business, was only 2.3% last quarter, which is much lower than its historical 6% growth.

Almost half of Rollins’ revenue comes from residential properties, so it’s a big problem.

But it isn’t insurmountable.

Rollins is redoing its digital marketing and websites to ensure its services are gaining traction with AI models.

In addition, the company is exploring direct advertising with AI companies to ensure customers are aware of its offerings.

Rollins’ pest control services are excellent… the company just needs to make some adjustments to keep its name in front of customers.

Plus, it’s not like rodents and insects care about the economy, so Rollins is well insulated from recessions.

Let’s get into the dividend.

The one silver lining to Rollins’ declining stock price is its higher dividend yield.

Rollins’ current dividend yield of 2.3% hasn’t been higher in over 25 years.

And the company just hit 24 years of consecutive dividend growth, with the next increase just around the corner.

Rollins is raising its dividend to $0.20 each quarter, which is 9.5% higher than its last payment.

But you need to act fast.

You must own stock in Rollins by the end of today to get the higher dividend check in your bank account.

Historically, Rollins paid a special dividend in December, but stopped the practice in 2021 and shifted to a more stable dividend increase schedule.

Since 2022, Rollins has doubled its dividend payment to its current amount.

And despite the rapid rise in its dividend, Rollins has kept its dividend payout ratio around 50% over the past couple of years.

Even though Rollins is struggling to grow organically, free cash flow still climbed almost 30% last quarter.

Free cash flow is the source for Rollins’ dividend payments, so a high growth rate means Rollins can continue to raise its dividend without running out of cash.

Plus, the company is incredibly profitable.

Its profit margin of 13% is one of the highest in the consumer services industry.

And its return on equity (ROE) of 37% is significantly higher than its peers, and near an all-time high for Rollins.

So, give Rollins a look to lock in a historically high dividend yield for the company.

What other dividend stocks are you looking at right now?

Michael Jennings

Dividend Stocks Research