GMG share price in focus
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.
REA shares
Founded in 1995, REA Group is a Melbourne-based real estate advertising company that is majority-owned by News Corp. In Australia, it’s best known for its Realestate.com.au platform.
REA Group operates on a global scale and now operates property websites in around 10 countries used by some 20,000 agents. In a typical month, the core Australian website gets over 55 million visits. While the business has diversified globally, Australian operations still account for the lion’s share of revenue. Within Australia, REA makes money by listing properties for sale or rent (i.e. the agent uses REA’s website to show properties, which the property owner is on the hook to pay). It also makes money from financial services (e.g. mortgage broking), but this is a much smaller part of the business.
GMG share price valuation
One way to have a ‘quick read’ of where the GMG 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, Goodman Group shares have a dividend yield of around 0.83%, compared to its 5-year average of 1.28%. Put simply, GMG shares are trading below their historical average dividend yield. Be careful how you interpret this information though – it could mean that dividends have fallen, or that the share price is increasing, or both. In the case of GMG, last year’s dividend was less than the 3-year average, so the dividend has been falling.
Since REA is more of a growth company than an established blue chip, a price-sales ratio might be a more appropriate assessment. The REA share price currently trades at a price-sales ratio of 18.11x, which compares to its 5-year long-term average of 17.41x. 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 Rea Group Ltd.
