RMD share price in focus
ResMed was founded in 1989 by Peter Farrell in Australia but is now based in San Diego, California. It is a medical equipment company that provides cloud-connectable continuous positive airway pressure, or CPAP, machines for the treatment of obstructive sleep apnea (OSA). Because of its US home base, ResMed shares have their primary listing on the NYSE but are also listed on the ASX.
ResMed operates on a global scale, with 10,000+ employees and a presence in over 140 countries. It has two primary business units: Sleep and Respiratory Care, and Software as a Service (SaaS). Within Sleep and Respiratory Care, ResMed provides industry-leading CPAP machines for sleep apnea. The Respiratory Care unit covers patients ranging from those who only require therapy from CPAP systems at night to those who are dependent on non-invasive or invasive ventilation for life-support. Within the SaaS unit ResMed provides software that assists durable or home medical equipment (DME/HME). Basically, it assists in out-of-hospital care.
Due to ResMed’s large digital health network powered by its cloud-connected devices, ResMed can leverage its industry-leading hardware (e.g. masks and humidifiers) and its SaaS data to drive insights, improve outcomes and reduce overall healthcare costs.
GMG shares
Founded in 1989, Goodman Group is a global integrated property group that owns, develops and manages real estate assets across several continents.
Goodman is the largest ASX-listed property group and operates in markets including Australia, New Zealand, the UK, Japan, the US, and Brazil.
The company is primarily involved with projects such as warehouses, large scale logistics facilities and business and office parks. Its mission is to build mutually beneficial, long-term relationships with its customers and deliver high quality assets.
RMD share price valuation
As a growth company, some of the trends we would be looking for from RMD include revenue growth, profit growth, and return on equity (ROE). Since 2021, RMD has grown revenue at a rate of 13.6% per year to reach $4,685m in FY24. Over the same time period, net profit has increased from $475m to $1,021m. RMD last reported a ROE of 22.7%.
Since GMG is more of a ‘mature’ or ‘blue-chip’ business, some of the metrics that might be important to us include the debt/equity ratio, average yield, and return on equity, or ROE. In FY24, Goodman Group reported a debt/equity ratio of 21.2%, meaning the company has more equity than debt.
As for dividends, since 2019 GMG has achieved an average dividend yield of 1.3% per year.
Finally, in FY24, GMG reported an ROE of 0.1%. For a mature business you generally want to see an ROE of more than 10%, so GMG’s returns are a bit less than what we’d expect.
It’s important to keep in mind that these are only a selection of metrics and don’t give us enough information to value the business or make an investment decision. To learn more about valuation, I’d recommend checking out one of our free online investing courses.
