MQG share price in focus
Macquarie Group, founded in 1969, is a global investment bank and financial services company.
Unlike other major Australian banks, Macquarie combines traditional banking with a robust asset management division, operating across sectors such as infrastructure, commodities, agriculture, real estate, and global equity markets.
Macquarie is committed to delivering consistent value to its shareholders, boasting over 55 years of uninterrupted profitability.
JBH shares
Founded in 1974, JB Hi-Fi is among Australia’s leading retailers of electronics and home entertainment products.
The company operates across three main segments: JB Hi-Fi Australia, JB Hi-Fi New Zealand, and The Good Guys, the latter acquired in 2016 and offering a similar product range.
JB Hi-Fi follows a cost-leadership strategy, focusing on competitive pricing to stand out against its rivals. Frequent discounts on its products enhance their perceived value, providing customers with attractive deals.
MQG & JBH share price valuation
We would consider MQG 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, Macquarie Group Ltd reported a debt/equity ratio of 258.5%, 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, MQG has delivered an average dividend yield of 3.2% per year. This is important to note if you’re looking for income from your investments.
Finally, in FY24, MQG reported an ROE of 10.4%. For a mature business you generally want to see an ROE of more than 10%, so MQG clears this hurdle.
As more of a growth company, some of the trends we might consider for JBH 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 a much more valuable figure than a single measure at one point in time.
Over the last 3 years, JBH has increased revenue at a rate of 2.5% per year to hit $9,592m in FY24. Meanwhile, net profit has fallen from $506m to $439m. As for ROE, JBH’s last reported figure was 29.5%.
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 MQG or JBH shares. To learn more about valuation, check out one of our free online investing courses.
