RMD share price in focus
ResMed is a medical equipment company based in San Diego, California, but originally founded in Australia by Peter Farrell. The company provides cloud-connectable continuous positive airway pressure, or CPAP, machines for the treatment of obstructive sleep apnea (OSA). ResMed shares are listed both on the NYSE and the ASX. Because the primary listing is in the US, the market announcements and reports might look a bit different to other Australian companies as they follow the US format.
ResMed is a global company with 10,000+ employees and a presence in over 140 countries. It has two primary business units: Sleep and Respiratory Care, and Software as a Service (SaaS). The industry-leading CPAP machines for sleep apnea are provided under the Sleep and Respiratory Care business. This covers patients ranging from those who only require therapy from CPAP systems at night to those who are dependent on non-invasive or invasive ventilation for life-support. Within the SaaS unit ResMed provides software used in durable or home medical equipment (DME/HME). Basically, it assists in out-of-hospital care.
ResMed leverages its industry-leading hardware (e.g. masks and humidifiers) and its SaaS data to drive insights, improve outcomes and reduce overall healthcare costs.
QBE shares
QBE started out as a marine insurance company in Townsville in the late 1800’s and today is one of the country’s largest insurers.
The insurance group operates in 27 countries and offers insurance products across commercial, consumer, reinsurance, and agriculture sectors.
While QBE began as an Australian company, only around 30% of the revenue is now generated in Australia, with another 30% from the US and the remaining revenue predominantly coming from Europe.
RMD & QBE share price valuation
As a growth company, one way to put a broad projection on the RMD 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, Resmed CDI shares have a price-sales ratio of 4.35x, compared to its 5-year average of 8.70x, 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 RMD, 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 QBE 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. QBE is paying a trailing dividend yield of around 3.86%, which compares to its 5-year average of 2.84%.
This is just one of many ways you could put a value on QBE 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 RMD or QBE.
