COH share price in focus
Cochlear, established in 1981 in Sydney, is a leading medical device company specializing in hearing solutions. The company designs, manufactures, and distributes three types of hearing implants tailored to various medical needs.
As a global leader in hearing technology, Cochlear has delivered over 750,000 implantable devices and employs more than 5,000 people across 50+ countries.
Its mission is to enhance the quality of life for individuals living with hearing-related conditions.
WOW shares
Founded in 1924, Woolworths is the leading supermarket operator in Australia and New Zealand with over 3,000 stores and over 100,000 employees. In terms of revenue and market share, it’s also one of Australia’s largest companies across any sector.
Besides the supermarket we all know (but don’t exactly love, according to consumer trust rankings), Woolworths Group also operates discount department stores under the Big W brand, as well as business-to-business (B2B) brands like PFD, which is a foodservice distributor. However, the 35%+ market share of Australian groceries is undoubtedly its crown jewel and leading revenue driver.
Woolworths has historically been a popular choice for ASX investors seeking dividend income due to its fully franked dividends, usually at a yield of over 3%. It also offers a ‘defensive’ earnings stream with most of its revenue coming from consumer staples. That means in an economic downturn, Woolworths might be less likely than other companies to see revenue decline significantly.
COH & WOW share price valuation
As a growth company, some of the trends we might investigate from COH 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, COH has grown revenue at a rate of 14.3% per year to reach $2,236m in FY24. Over the same stretch of time, net profit has increased from $324m to $357m. As for ROE, COH last reported a ROE of 19.9%.
Since WOW 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, Woolworths Group Ltd reported a debt/equity ratio of 300.2%, meaning the company is leveraged (it has more debt than equity). Higher debt levels come with increased risk so it’s important that a leveraged company has stable returns and the capacity to pay interest on its debts.
As for dividends, since 2020 WOW has paid an average dividend yield of 2.9% per year.
Finally, in FY24, WOW reported an ROE of 1.9%. For a mature business you’re generally looking for an ROE of more than 10%, so WOW’s returns are a bit less than what we’d expect.
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.
