MIN share price in focus
Mineral Resources Limited (MIN) is a diversified Australian mining company primarily focused on the extraction of lithium and iron ore in Western Australia.
In addition to its mining operations, MIN offers mining and engineering services to external clients through its wholly-owned subsidiary, CSI Mining Services (CSI). CSI provides capital infrastructure and operational expertise across Western Australia, Queensland, and the Northern Territory.
What sets Mineral Resources apart from its competitors is its in-house engineering and construction capabilities, which provide full control and flexibility throughout the product development process.
REA shares
Founded in 1995, REA Group is a Melbourne-based real estate advertising company, with News Corp as its majority shareholder. It is best known in Australia for its flagship platform, Realestate.com.au.
REA Group operates globally, managing property websites across 10 countries, serving around 20,000 property agents. In Australia, its core website attracts over 55 million visits per month, and the Australian operations still contribute the majority of the company’s revenue. REA generates income primarily by charging property owners for listings, facilitated through agents who use the platform to showcase properties for sale or rent. The company also earns revenue through financial services, such as mortgage broking, though this remains a smaller portion of the business.
REA’s competitive edge lies in its strong network effects and economies of scale. With significantly more users and views than its closest competitor, Domain, REA is well-positioned to dictate pricing and market dynamics. Additionally, REA benefits from its diversified presence across the real estate ecosystem, including property listings, advertising, mortgage broking, and house-sharing services.
MIN & REA 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.
As a growth company, some of the trends we might consider from REA shares include revenue growth, profit growth, and return on equity (ROE). I say ‘trends’ because it’s always important to look at these figures over a few years. The trend is much more valuable info than a single measure at one point in time.
Over the last 3 years, REA has increased revenue at a rate of 18.6% per year to hit $1,677m in FY24. Meanwhile, net profit has fallen from $323m to $303m. REA’s last reported ROE was 18.9%.
Please keep in mind that context is important. These metrics give us some indication of company performance, but it’s just the start of valuing MIN or REA shares. To learn more about valuation, check out one of our free online investing courses.
