ALL share price in focus
Aristocrat Leisure is an Australian gambling machine operator headquartered in Sydney. It was founded by Len Ainsworth in 1953.
Today, Aristocrat is the largest gambling machine manufacturer in Australia and one of the largest manufacturers of slot machines in the world. However, the business has diversified over the years and now also makes online mobile games. This segment has grown steadily to now make up nearly half of the company’s revenue.
The gaming machines Aristocrat make can be sold outright to a venue or gaming operator. Alternatively, a machine can be installed with a proportion of the revenue generated being paid on a recurring basis back to Aristocrat.
STO shares
Santos Ltd, founded in the 1950s, is one of Australia’s largest oil and gas companies. The company owns and operates an extensive portfolio of oil and gas fields, supported by a network of pipelines and complementary facilities.
Initially established as an exploration-focused business, its name is an acronym for South Australia Northern Territory Oil Search.
ALL & STO share price valuation
As a growth company, one way to put a rough guesstimate on the ALL 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, Aristocrat Leisure Ltd shares have a price-sales ratio of 4.28x, compared to its 5-year average of 5.64x, meaning its shares are trading lower than their historical average. This could mean that the share price has fallen, or sales have increased, or both. In the case of ALL, 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 STO is more of a ‘blue chip’ company, we could look at its dividend yield 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. STO is paying a trailing dividend yield of around 4.79%, which compares to its 5-year average of 4.64%.
This is just one of many ways you could put a value on STO 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 which can help you learn how to value a company like ALL or STO.
