The Cochlear Ltd (ASX:COH) share price is up 1.0% since the start of 2024. At the same time, the QBE Insurance Group Ltd (ASX:QBE) share price is 3.0% away from its 52-week high. This brief article explains why it could be worth adding COH and QBE shares to your ASX investing stock watchlist.
COH share price in focus
Cochlear, established in 1981 in Sydney, is a leading medical device company specializing in hearing solutions. The company designs, manufactures, and distributes three types of hearing implants tailored to various medical needs.
As a global leader in hearing technology, Cochlear has delivered over 750,000 implantable devices and employs more than 5,000 people across 50+ countries.
Its mission is to enhance the quality of life for individuals living with hearing-related conditions.
QBE shares
QBE started out as a marine insurance company in Townsville in the late 1800’s and today is one of the country’s largest insurers.
The insurance group operates in 27 countries and offers insurance products across commercial, consumer, reinsurance, and agriculture sectors.
While QBE began as an Australian company, only around 30% of the revenue is now generated in Australia, with another 30% from the US and the remaining revenue predominantly coming from Europe.
COH & QBE share price valuation
As a growth company, some of the trends we might investigate from COH 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, COH has grown revenue at a rate of 14.3% per year to reach $2,236m in FY24. Over the same stretch of time, net profit has increased from $324m to $357m. COH last reported a ROE of 19.9%.
Since QBE 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 CY23, QBE Insurance Group Ltd reported a debt/equity ratio of 31.0%, meaning the company has more equity than debt.
As for dividends, since 2019 QBE has achieved an average dividend yield of 2.7% per year.
Finally, in CY23, QBE reported an ROE of 14.5%. For a mature business you’re generally looking for an ROE of more than 10%, so QBE clears this hurdle.
Keep in mind that these are only a small selection of metrics. We don’t have 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.
