FMG share price in focus
Fortescue Ltd, founded in 2003 and headquartered in Perth, is a leading iron ore production and exploration company with assets located in the Pilbara region of Western Australia.
The company primarily focuses on iron ore production, shipping over 190 million tonnes annually. In addition to its iron ore operations, Fortescue has been expanding its exploration efforts across Australia, Argentina, Chile, Brazil, and Kazakhstan, targeting key materials such as copper, rare earths, and lithium.
This expansion aligns with the company’s long-term strategy to capitalise on the growing demand for these resources, driven by the global shift to renewable energy. Fortescue aims to meet the increasing need for copper, lithium, and other rare earths in the coming years.
WOW shares
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.
FMG share price valuation
We would consider FMG 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, Fortescue Ltd reported a debt/equity ratio of 27.6%, meaning the company has more equity than debt.
Over the last 5 years, FMG has delivered an average dividend yield of 10.5% per year. This is important to note if you’re looking for income from your investments.
Finally, in FY24, FMG reported an ROE of 30.2%. For a mature business you generally want to see an ROE of more than 10%, so FMG clears this hurdle.
In FY24, Woolworths Group Ltd reported a debt/equity ratio of 300.2%, meaning the company is leveraged.
As for dividends, since 2019 WOW has achieved an average dividend yield of 2.9% per year, and in FY24 reported an ROE of 1.9%
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.
