COL share price
Coles is an Australian retailer providing customers with everyday products including fresh food, groceries, general merchandise, liquor, fuel and financial services. It was founded in 1914 in Victoria, where its HQ still remain.
Coles was formerly owned by conglomerate Wesfarmers from 2007 until 2018, when it was spun-off and listed as a separate entity on the ASX under the ticker symbol ‘COL’. Coles’ earnings are dominated by the supermarkets side of the business, however, it partly or fully owns or operates adjacent businesses like flybuys, Liquorland, First Choice, Vintage Cellars, Coles Express and more.
Every week millions of Australians choose to shop for essential food and drink at Coles because of its prices, range and location. While it is the smaller brother of Woolworths, which has nearly 40% market share, Coles isn’t too far behind, with about 28%.
Since we consider Coles Group Ltd to be a blue chip stock, or a mature business, we like to look at things like return on invested capital (ROIC) and revenue growth as signs of sustainability. In FY23, Coles Group Ltd had an ROIC of 13.80% and revenue has compounded at 2.8% in recent years. Anything over 10% ROIC is pretty good for a mature-style business, since its cost of capital is likely below that level, so Coles Group Ltd crosses this hurdle.
SOL share price
Founded in 1903, Washington H. Soul Pattinson (WHSP) is an investment company with a diversified 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 mission is to deliver superior returns to its shareholders by creating capital growth and steadily increasing dividends as a holding company. It’s the second-oldest publicly listed company on the ASX and has a strong track record of capital growth and dividends. It should be thought of as family-run LIC, for the benefit of all shareholders (who are deeply aligned).
Share price valuation
One way to have a ‘fast read’ of where the COL share price is, is to study something like dividend yield thru time. Remember, the dividend yield is effectively the ‘cash flow’ to a share holder, but it can be influenced by yearly or bi-yearly fluctuations. Currently, Coles Group Ltd shares have a dividend yield of around 4.18%, which compares to its 5-year average of 3.82%. Put simply, COL shares are trading below their historical average dividend yield.
Since it is a more mature-style business, the SOL share price is offering a historical dividend yield of around 2.86%, which compares to its 5-year average of 2.54%. The Rask websites, especially our Rask Education platform, offer free tutorials explaining Discounted Cash Flow (DCF) and Dividend Discount Models (DDM). Both of these models would be a better way to value the SOL share price.
