TLS share price in focus
Founded in 1975, Telstra is Australia’s largest telecommunications company by market share, with over 22.5 million retail mobile accounts as of 2023.
Telstra is responsible for building and operating telecommunications networks across Australia, offering a variety of services, including fixed broadband, mobile, data and IP, and digital media. In addition to its operations within Australia, Telstra has a presence in more than 20 countries, providing services to governments and businesses globally.
Telstra’s competitive advantage lies in its extensive reach and scale, covering 99.6% of the Australian population and delivering 5G services to over 85% of the country.
REH shares
Reece Limited has been serving Australia for over a century and is now the nation’s largest supplier of plumbing and bathroom products.
While widely recognized as a plumbing retailer, Reece has expanded its offerings to include products and services for irrigation, pools, civil construction projects, and HVAC systems for heating, ventilation, and refrigeration.
The company has achieved steady revenue growth in recent years, and although its dividend yield is typically low, its payouts have remained consistent.
TLS & REH share price valuation
We would consider TLS 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, Telstra Group Ltd reported a debt/equity ratio of 99.4%, meaning the company has more equity than debt.
Over the last 5 years, TLS has delivered an average dividend yield of 3.6% per year. This is important to note if you’re looking for income from your investments.
Finally, in FY24, TLS reported an ROE of 10.7%. For a mature business you generally want to see an ROE of more than 10%, so TLS clears this hurdle.
&Reece Ltd reported a debt/equity ratio of 47.2% in FY24, meaning the company has more equity than debt.
As for dividends, since 2019 REH has achieved an average dividend yield of 1.1% per year, and in FY24 reported an ROE of 11.2%
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.
