QAN share price in focus
Qantas was founded in 1921 and is Australia’s largest airline operator by fleet size, number of international flights, and number of destinations.
It’s involved in the operation of domestic and international flights, freight services and the management of its frequent flyer loyalty program.
Qantas also owns Jetstar meaning they have significant pricing and market power in the highly concentrated Australian market.
FLT shares
Founded in Sydney in 1982, Flight Centre is a travel agency that operates under multiple names across over 80 countries.
It’s involved in both the retail and corporate sectors and also offers additional services such as tour operations, travel experiences and hotel management.
Flight Centre aims to offer a personal touch that many online travel agencies might not have. Consultants are able to handle all the work involved and are often able to find exclusive deals for their customers, which keeps them coming back.
QAN share price valuation
We would consider QAN 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, Qantas Airways Limited reported a debt/equity ratio of 2241.8%, meaning the company is leveraged (it has more debt than equity). This can increase risk so it’s important that a leveraged company has stable returns and the capacity to pay interest on its debts.
Over the last 5 years, QAN has delivered an average dividend yield of 1.2% per year. This is important to note if you’re looking for income from your investments.
Finally, in FY24, QAN reported an ROE of 823.0%. For a mature business you generally want to see an ROE of more than 10%, so QAN clears this hurdle.
As a growth company, some of the trends we would be looking for from FLT shares include revenue growth, profit growth, and return on equity (ROE). Over the last 3 years, FLT has increased revenue at a rate of 89.8% per year to hit $2,708m in FY24. Meanwhile, net profit has tumbled from $433m to $140m. FLT’s last reported ROE was 11.9%.
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 QAN or FLT shares. To learn more about valuation, I’d recommend signing up for one of our free online investing courses.
