MIN share price in focus
Mineral Resources Limited is a diversified Australian mining company focused on lithium and iron ore extraction across Western Australia.
MIN also provides mining and engineering services for external clients through its wholly-owned subsidiary, CSI Mining Services (CSI). Through CSI, Mineral Resources can provide capital infrastructure and operational expertise to clients across WA, Queensland, and the Northern Territory.
MIN aims to set itself apart from its competitors by maintaining in-house engineering and construction capability that grants full control and flexibility during product development.
Since we consider Mineral Resources Ltd to be a blue chip stock, or a mature business, we like to look at things like return on invested capital (ROIC) and revenue growth as signs of sustainability. In FY24, Mineral Resources Ltd had an ROIC of 3.60% and revenue has compounded at 12.2% in recent years. If a mature business struggles to consistently hit 10% ROIC it could be a sign the business may not be investing its capital effectively. This is just a rule of thumb we follow.
TLS shares
Starting life as a state-owned enterprise, Telstra has gone through many stages to today be Australia’s largest telecommunications company by market share. They provided over 22.5 million retail mobile accounts in 2023.
Telstra is responsible for building and operating telecommunication networks. Revenue comes from a range of activities including fixed broadband, mobile, data and IP, and digital media. The company has also expanded outside of Australia to over 20 countries where it provides services to governments and businesses.
The competitive advantage that Telstra has over competitors lies in its reach and scale, providing coverage to 99.6% of the Australian population and 5G services to over 85%.
MIN share price valuation
We would consider MIN to be a ‘mature’ or ‘blue-chip’ business, so some of the metrics that could be worth considering include the debt/equity ratio, average yield, and return on equity, or ROE. These measures give us a sense of the company’s debt levels, their ability to generate returns from their assets, and their ability to consistently return profits to shareholders.
For FY24, Mineral Resources Ltd reported a debt/equity ratio of 148.9%, meaning the company is leveraged (it has more debt than equity). This can increase risk so it’s important that a leveraged company is generating stable returns and has sufficient cash flow to pay interest on its debts.
Over the last 5 years, MIN has delivered an average dividend yield of 2.4% per year. This is important to note if you’re looking for income from your investments.
Finally, in FY24, MIN reported an ROE of 3.2%. For a mature business you generally want to see an ROE of more than 10%, so MIN’s returns are a bit less than what we’d expect.
In FY24, Telstra Group Ltd reported a debt/equity ratio of 99.4%, meaning the company has more equity than debt.
As for dividends, since 2019 TLS has achieved an average dividend yield of 3.6% per year, and in FY24 reported an ROE of 10.7%
It’s important to keep in mind that these are only a small selection of metrics and don’t give us enough information to value the business or make an investment decision. To learn more about valuation, check out one of our free online investing courses.
