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.
HUB shares
HUB24 is a leading player in the wealth management software industry, offering diversified solutions across financial advice, superannuation, and investment management.
HUB24’s three main products are its platforms HUB24, Class, and myprosperity. The HuB24 platform is designed for financial advisers and their clients, providing access to a range of managed funds and investment products. Class is a leading software for self-managed super funds to manage portfolios, legal documentation, and compliance. myprosperity is focused on accountants and advisers, enabling them to provide an enhanced service and customer experience.
HUB24’s competitive advantage is in the quality of its service. In 2024 they’ve been awarded Overall Best Platform in the Adviser Ratings Financial Advice Landscape Report, and ranked first for Overall Satisfaction and Brand Image and Reputation in the 2024 Wealth Insights Platform Service Level Report.
DOW share price valuation
One way to have a ‘quick read’ of where the DOW 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, Downer EDI Ltd shares have a dividend yield of around 2.98%, compared to its 5-year average of 3.74%. In other words, DOW shares are trading lower than 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 DOW, we can see that last year’s dividend was less than the 3-year average, so the dividend has been falling.
Since HUB is more of a ‘growth’ company than an established blue chip, a price-sales ratio might be a more appropriate assessment. This ratio gives us an idea of how the company has historically been valued relative to its earnings, which can indicate if the company is over or undervalued today. The HUB share price currently trades at a price-sales ratio of 17.66x, which compares to its 5-year long-term average of 13.32x. So, its shares are trading above their historical average. Don’t forget, 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! It’s a good idea to use multiple valuation methods to value a share like Hub24 Ltd.
