REA share price in focus
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.
BXB shares
Brambles manages the world’s largest pool of reusable pallets, crates, and containers, providing a service central to most supply chains globally.
The company is better known by its main brand CHEP, which has operations across the Asia-Pacific, Americas, and Europe Middle East and Africa (EMEA) regions.
Brambles makes money through a hiring model. For example, a manufacturer will make a product, then transfer the product to a retailer on CHEP pallets. Those pallets are then transferred back to CHEP or to another manufacturer or retailer in the supply chain. At each step, Brambles collects daily hire fees on its pallets and crates.
REA & BXB share price valuation
As a growth company, some of the trends we might investigate from REA include revenue growth, profit growth, and return on equity (ROE). These measures can indicate the growth rates and prospects of the company, as well as their ability to generate returns from their assets.
Since 2021, REA has grown revenue at a rate of 18.6% per year to reach $1,677m in FY24. Over the same stretch of time, net profit has fallen from $323m to $303m. REA last reported a ROE of 18.9%.
Since BXB is more of a ‘mature’ or ‘blue-chip’ business, some of the metrics that could be considered important include the debt/equity ratio, average yield, and return on equity, or ROE. These are useful as they give us an idea of debt levels and the company’s ability to generate a return on assets and pay out profits (which is what we want from a blue chip). In FY24, Brambles Ltd reported a debt/equity ratio of 81.8%, meaning the company has more equity than debt.
As for dividends, since 2019 BXB has achieved an average dividend yield of 2.7% per year.
Finally, in FY24, BXB reported an ROE of 25.6%. For a mature business you’re generally looking for an ROE of more than 10%, so BXB clears this hurdle.
Keep in mind that these are only a small selection of metrics. We don’t have 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.
