NWL share price in focus
Founded in 1999, Netwealth is a wealth management firm that offers a platform for financial planners to manage their clients’ investments.
As of 2024, Netwealth has over 140,000 account holders on its platform and over $88 billion of funds under administration (FUA).
Netwealth’s key advantage lies in its scale and user-friendly online platform. With a simple dashboard, users can easily buy and sell investments, track performance, and access charts, reports, and tax statements all in one place.
SOL shares
Founded in 1903, Washington H. Soul Pattinson (WHSP) is an investment company with a diversified portfolio spanning various industries and asset classes.
Some of its largest holdings include significant stakes in well-known publicly listed companies such as TPG Telecom (ASX: TPG), New Hope Group (ASX: NHC), and a cross-shareholding in Brickworks (ASX: BKW).
SOL’s goal is to deliver strong returns to its shareholders through capital growth and a consistent increase in dividends as a holding company. As the second-oldest publicly listed company on the ASX, it boasts a long history of capital appreciation and dividend reliability. In fact, it has never missed a dividend payment since its listing in 1903! SOL operates like a family-run LIC, with a focus on the benefit of all shareholders, who are closely aligned with the company’s success.
NWL share price valuation
As a growth company, some of the trends we might investigate from NWL 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, NWL has grown revenue at a rate of 20.8% per year to reach $255m in FY24. Over the same stretch of time, net profit has increased from $54m to $83m. NWL last reported a ROE of 62.3%.
Since SOL 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, Washington H Soul Pattinson & Company Ltd reported a debt/equity ratio of 8.5%, meaning the company has more equity than debt.
As for dividends, since 2019 SOL has achieved an average dividend yield of 2.4% per year.
Finally, in FY24, SOL reported an ROE of 5.6%. For a mature business you’re generally looking for an ROE of more than 10%, so SOL’s returns are a bit less than what we’d expect.
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.
