PME share price in focus
Founded in 1983, Pro Medicus is a provider of radiology IT software serving hospitals, imaging centres and healthcare groups worldwide.
The company’s suite of products focuses on Radiology Information Systems (RIS), Picture Archiving and Communication Systems (PACS), and advanced visualization solutions. These tools support various functions, from patient scheduling and billing to rapid medical imaging interpretation and analysis.
Pro Medicus’ key value proposition lies in its flagship Visage software, which enables radiologists to remotely view large image files generated by X-rays on mobile devices. This capability allows diagnostic decisions to be made on-the-go, potentially improving patient outcomes by providing timely and accessible information.
RIO shares
Founded in 1873, Rio Tinto is today the world’s second largest metal and mining company, behind only BHP Group. Rio Tinto is engaged in minerals and metals exploration, development, production and processing.
Rio can be divided into four core business units: Aluminium, Copper & Diamonds, Energy & Minerals and Iron Ore.
Of the four units, iron ore (the primary component in steel manufacturing) is by far the largest export. It’s no surprise then that the performance of the company can be strongly affected by the price of iron ore and other key commodities, making earnings somewhat volatile.
PME & RIO share price valuation
As a growth company, some of the trends we might investigate from PME 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, PME has grown revenue at a rate of 33.4% per year to reach $162m in FY24. Over the same stretch of time, net profit has increased from $31m to $83m. As for ROE, PME last reported a ROE of 50.7%.
Since RIO 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 CY24, Rio Tinto Ltd reported a debt/equity ratio of 23.9%, meaning the company has more equity than debt.
As for dividends, since 2020 RIO has paid an average dividend yield of 6.8% per year.
Finally, in CY24, RIO reported an ROE of 20.3%. For a mature business you’re generally looking for an ROE of more than 10%, so RIO clears this hurdle.
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.
