FLT share price in focus
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.
COL shares
Coles is an Australian retailer providing customers with everyday products including fresh food, groceries, general merchandise, liquor, fuel and financial services. It was founded in 1914 in Victoria which it still calls its home base.
Coles was formerly owned by conglomerate Wesfarmers from 2007 until 2018, when it was spun-off and listed as a separate entity on the ASX under the ticker symbol ‘COL’. Coles’ earnings are dominated by the supermarkets side of the business, however, it partly or fully owns or operates adjacent businesses like flybuys, Liquorland, First Choice, Vintage Cellars, Coles Express and more.
While Coles is in a way the ‘little brother’ to Woolworths, it still controls a significant share of the Australian grocery market (about 28%). In its short time as its own listed entity, Coles has established itself as a handy and reliable dividend payer.
FLT share price valuation
As a growth company, some of the trends we might investigate from FLT include revenue growth, profit growth, and return on equity (ROE). These measures can indicate the growth rates and prospects of the company, as well as their ability to generate returns from their assets.
Since 2021, FLT has grown revenue at a rate of 89.8% per year to reach $2,708m in FY24. Over the same stretch of time, net profit has fallen from $433m to $140m. FLT last reported a ROE of 11.9%.
Since COL is more of a ‘mature’ or ‘blue-chip’ business, some of the metrics that could be considered important include the debt/equity ratio, average yield, and return on equity, or ROE. These are useful as they give us an idea of debt levels and the company’s ability to generate a return on assets and pay out profits (which is what we want from a blue chip). In FY24, Coles Group Ltd reported a debt/equity ratio of 278.4%, meaning the company is leveraged (it has more debt than equity). Higher debt levels comes with increased risk so it’s important that a leveraged company has stable returns and the capacity to pay interest on its debts.
As for dividends, since 2019 COL has achieved an average dividend yield of 3.8% per year.
Finally, in FY24, COL reported an ROE of 32.4%. For a mature business you’re generally looking for an ROE of more than 10%, so COL clears this hurdle.
It’s important to keep in mind that these are only a small selection of metrics and don’t give us enough information to value the business or make an investment decision. To learn more about valuation, check out one of our free online investing courses.
