The Coles Group Ltd (ASX:COL) share price has risen 10.3% since the start of 2024. The Pro Medicus Limited (ASX:PME) share price is about 140.9% off its 52-week low.
COL share price in focus
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 which it still calls its home base.
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.
While Coles is in a way the ‘little brother’ to Woolworths, it still controls a significant share of the Australian grocery market (about 28%). In its short time as its own listed entity, Coles has established itself as a handy and reliable dividend payer.
PME shares
Founded in 1983, Pro Medicus is a provider of radiology IT software for hospitals, imaging centres and health care groups worldwide.
The Pro Medicus suite of products centre around radiology information systems (RIS), Picture Archiving and Communication Systems (PACS), and advanced visualisation solutions. These products support everything from patient scheduling and billing to fast medical imaging interpretations and analysis.
The company’s value proposition partly lies within its flagship Visage software which allows radiologists to view large image files generated by X-rays remotely on mobile devices. This allows diagnostic decisions to be made on-the-go and ideally improves patient outcomes.
COL share price valuation
One way to have a ‘fast read’ of where the COL share price is could be to study something like dividend yield through time. Remember, the dividend yield is effectively the ‘cash flow’ to a shareholder, but it can fluctuate year-to-year or between payments. Currently, Coles Group Ltd shares have a dividend yield of around 3.82%, compared to its 5-year average of 3.76%. Put simply, COL shares are trading higher than their historical average dividend yield. Be careful how you interpret this information though – it could mean that dividends have increased, or that the share price is falling, or both. In the case of COL, last year’s dividend was greater than the 3-year average, so the dividend has been growing.
Since PME is more of a growth company than an established blue chip, a price-sales ratio might be a more appropriate assessment. The PME share price currently trades at a price-sales ratio of 115.96x, which compares to its 5-year long-term average of 82.69x. So, its shares are trading higher than their historical average. However, a simple multiple like this should only be the start of your research. The Rask websites offer free online investing courses, created by analysts explaining things like Discounted Cash Flow (DCF) and Dividend Discount Models (DDM). They even include free valuation spreadsheets! Just remember there are many different ways to value a share, like Pro Medicus Limited.
