CAR share price in focus
Since the 1990s, CAR Group has been a leading operator of online marketplaces focused on cars, motorcycles, and other vehicles.
As a marketplace provider, CAR Group aims to simplify the buying and selling process, offering added security and convenience for both buyers and sellers. Through a blend of technology and advertising solutions, the company ensures peace of mind for users when making significant purchases.
Over the years, CAR Group has experienced steady growth and now operates globally, with a presence in markets such as Australia (carsales), South Korea (Encar), the United States (Trader Interactive), and Chile (chileautos).
SOL shares
Washington H. Soul Pattinson (WHSP) is a diversified investment company with a portfolio of assets across a range of industries and asset classes.
Some of SOL’s largest holdings include stakes in other 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 aim is to deliver superior returns to its shareholders by creating capital growth and steadily increasing dividends as a holding company. As the second-oldest publicly listed company on the ASX it has developed a strong track record of doing just that. In fact, SOL has never missed a dividend payment since listing in 1903! It could best be thought of as a family-run LIC with directors that are financially aligned with shareholders.
CAR & SOL share price valuation
As a growth company, some of the trends we might investigate from CAR 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, CAR has grown revenue at a rate of 37.0% per year to reach $1,099m in FY24. Over the same stretch of time, net profit has increased from $131m to $250m. As for ROE, CAR last reported a ROE of 8.6%.
Since SOL 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, Washington H Soul Pattinson & Company Ltd reported a debt/equity ratio of 8.5%, meaning the company has more equity than debt.
As for dividends, since 2020 SOL has paid an average dividend yield of 2.4% per year.
Finally, in FY24, SOL reported an ROE of 5.6%. For a mature business you’re generally looking for an ROE of more than 10%, so SOL’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.
