WOW share price in focus
Founded in 1924, Woolworths is the leading supermarket operator in Australia and New Zealand with over 3,000 stores and over 100,000 employees. In terms of revenue and market share, it’s also one of Australia’s largest companies across any sector.
Besides the supermarket we all know (but don’t exactly love, according to consumer trust rankings), Woolworths Group also operates discount department stores under the Big W brand, as well as business-to-business (B2B) brands like PFD, which is a foodservice distributor. However, the 35%+ market share of Australian groceries is undoubtedly its crown jewel and leading revenue driver.
Woolworths has historically been a popular choice for ASX investors seeking dividend income due to its fully franked dividends, usually at a yield of over 3%. It also offers a ‘defensive’ earnings stream with most revenue coming from consumer staples. That means in an economic downturn, Woolworths might be less likely than other companies to see revenue decline significantly.
QAN shares
Qantas was founded in 1921 and is today 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 under its Qantas and Jetstar brands, as well as freight services and the management of its frequent flyer loyalty program.
Despite (or perhaps because of) its significant market power, the airline has fallen out of favour with Australian consumers over the last few years, consistently ranking as one of the country’s most distrusted brands according to Roy Morgan surveys. Still, with a huge market share and more services than other airlines they’ve managed to continue growing revenue and profit since the end of the pandemic.
WOW share price valuation
One way to have a ‘quick read’ of where the WOW share price is could be to study something like dividend yield over time. This can give us a sense of the stability of the company and whether they can consistently pay out a percentage of profits.
Remember, the dividend yield is basically the ‘cash flow’ to a shareholder, but it can fluctuate year-to-year or between payments. Currently, Woolworths Group Ltd shares have a dividend yield of around 4.83%, compared to its 5-year average of 2.92%. In other words, WOW shares are trading higher than their historical average dividend yield. Be careful how you interpret this information though – it could mean that dividends are growing, or it could mean the share price is falling, or both. In the case of WOW, the annual report shows last year’s dividend was greater than the 3-year average, so the dividend has been growing.
QAN is offering a historical dividend yield of around 0.00%, which compares to its 5-year average of 1.22%. Of course, this is just one of many ways you could put a value on QAN shares. The Rask websites offer free online investing courses, created by analysts explaining valuation methods like Discounted Cash Flow (DCF) and Dividend Discount Models (DDM). They even include free valuation spreadsheets! It’s important to look at multiple methods when you’re trying to value the QAN share price.
