DOW share price in focus
Downer is the leading provider of integrated infrastructure services in Australia and New Zealand. They’re responsible for building, maintaining, and operating transit systems, utilities services, and public infrastructure.
While the name might not be familiar, you’ve definitely come across their work. Downer operate services like the Yarra Trams in Melbourne, and build the passenger trains you see in most states.
Downer separates its business into three main segments of Transport, Utilities, and Facilities. Transport delivers a little over 50% of their revenue, and Utilities and Facilities around 20% and 30% respectively.
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.
DOW share price valuation
We would consider DOW to be a ‘mature’ or ‘blue-chip’ business, so some of the metrics that might be important to us include the debt/equity ratio, average yield, and return on equity, or ROE. For FY24, Downer EDI Ltd reported a debt/equity ratio of 81.1%, meaning the company has more equity than debt.
Over the last 5 years, DOW has delivered an average dividend yield of 3.7% per year. This is important to note if you’re looking for income from your investments.
Finally, in FY24, DOW reported an ROE of 3.6%. For a mature business you generally want to see an ROE of more than 10%, so DOW’s returns are a bit less than what we’d expect.
As a growth company, some of the trends we would be looking for from PME shares include revenue growth, profit growth, and return on equity (ROE). Over the last 3 years, PME has increased revenue at a rate of 33.4% per year to hit $162m in FY24. Meanwhile, net profit has risen from $31m to $83m. PME’s last reported ROE was 50.7%.
Please keep in mind that context is important – these metrics give us some indication of company performance, but we need a lot more info to work out the value of DOW or PME shares. To learn more about valuation, I’d recommend signing up for one of our free online investing courses.
