NWL share price in focus
Netwealth is a wealth management software business that provides a platform for financial planners to manage client money.
As of 2024, Netwealth has over 140,000 account holders on its platform and over $88 billion of funds under administration (FUA), making it a major industry player.
Netwealth’s big advantage is its scale and the user-friendly interface offered through the online platform. Through one central dashboard, users can buy and sell investments, track performance, and view account summaries, reports and tax statements.
SOL shares
Founded in 1903, Washington H. Soul Pattinson (WHSP) is an investment company with a diversified portfolio spanning various industries and asset classes.
Some of its largest holdings include significant stakes in well-known publicly listed companies such as TPG Telecom (ASX: TPG), New Hope Group (ASX: NHC), and a cross-shareholding in Brickworks (ASX: BKW).
SOL’s goal is to deliver strong returns to its shareholders through capital growth and a consistent increase in dividends as a holding company. As the second-oldest publicly listed company on the ASX, it boasts a long history of capital appreciation and dividend reliability. In fact, it has never missed a dividend payment since its listing in 1903! SOL operates like a family-run LIC, with a focus on the benefit of all shareholders, who are closely aligned with the company’s success.
NWL share price valuation
As a growth company, one way to put a broad estimate on the NWL share price could be to compare its price-to-sales multiple over time. This can tell us how the company has historically been valued relative to its total revenue.
Currently, Netwealth Group Ltd shares have a price-sales ratio of 29.52x, compared to its 5-year average of 23.72x, meaning its shares are trading above their historical average. This could mean that the share price has increased, or that sales have declined, or both. In the case of NWL, revenue has been growing over the last 3 years. Of course, context is important – and this is just one valuation technique. Investment decisions can’t just be based on one metric, but this can be a rough starting point.
Since it is a more of a ‘blue chip’ company, we could look at the dividend yield of SOL to determine its value. If we compare it to the historical dividend yield, we can get a sense of the stability of the company and its ability to pay out income. SOL is offering a trailing dividend yield of around 2.74%, which compares to its 5-year average of 2.44%. Of course, this is just one of many ways you could put a value on SOL shares. The Rask websites offer free online investing courses, created by analysts explaining valuation methods like Discounted Cash Flow (DCF) and Dividend Discount Models (DDM). They even include free valuation spreadsheets! It’s important to look at multiple methods when you’re trying to value the SOL share price.
