COL share price in focus
Coles is an Australian retailer offering a wide range of everyday products, including fresh food, groceries, general merchandise, liquor, fuel, and financial services. Founded in 1914 in Victoria, which remains its home base, Coles has been a prominent player in the Australian retail sector for over a century.
Previously owned by Wesfarmers from 2007 to 2018, Coles became a standalone entity when it was spun off and listed on the ASX under the ticker symbol ‘COL’. While the supermarket division is the primary source of earnings, Coles also owns or operates several related businesses, including flybuys, Liquorland, First Choice, Vintage Cellars, and Coles Express.
Although often seen as the ‘smaller sibling’ to Woolworths, Coles holds a significant share of the Australian grocery market, accounting for around 28%. Since becoming a separate listed company, Coles has earned a reputation as a reliable dividend payer.
CAR shares
Since the 1990s, CAR Group has been a leading operator of online marketplaces focused on cars, motorcycles, and other vehicles.
As a marketplace provider, CAR Group aims to simplify the buying and selling process, offering added security and convenience for both buyers and sellers. Through a blend of technology and advertising solutions, the company ensures peace of mind for users when making significant purchases.
Over the years, CAR Group has experienced steady growth and now operates globally, with a presence in markets such as Australia (carsales), South Korea (Encar), the United States (Trader Interactive), and Chile (chileautos).
COL share price valuation
We would consider COL to be a ‘mature’ or ‘blue-chip’ business, so some of the metrics that could be worth considering include the debt/equity ratio, average yield, and return on equity, or ROE. These measures give us a sense of the company’s debt levels, their ability to generate returns from their assets, and their ability to consistently return profits to shareholders.
For FY24, Coles Group Ltd reported a debt/equity ratio of 278.4%, meaning the company is leveraged (it has more debt than equity). This can increase risk so it’s important that a leveraged company is generating stable returns and has sufficient cash flow to pay interest on its debts.
Over the last 5 years, COL has delivered an average dividend yield of 3.8% per year. This is important to note if you’re looking for income from your investments.
Finally, in FY24, COL reported an ROE of 32.4%. For a mature business you generally want to see an ROE of more than 10%, so COL clears this hurdle.
As a growth company, some of the trends we might consider from CAR shares include revenue growth, profit growth, and return on equity (ROE). I say ‘trends’ because it’s always important to look at these figures over a few years. The trend is much more valuable info than a single measure at one point in time.
Over the last 3 years, CAR has increased revenue at a rate of 37.0% per year to hit $1,099m in FY24. Meanwhile, net profit has increased from $m to $250m. CAR’s last reported ROE was 8.6%.
Please keep in mind that context is important – these metrics give us some indication of company performance, but it’s just the start of valuing COL or CAR shares. To learn more about valuation, check out one of our free online investing courses.
