SCG share price in focus
Scentre Group is a real estate company specializing in shopping centres, operating under the Westfield brand in Australia and New Zealand.
The group manages a portfolio of 42 centres valued at over $34 billion, boasting an occupancy rate exceeding 99% and attracting more than half a billion visitors annually.
These centres are strategically located in prime trade areas and feature long-term tenancies with retailers catering to diverse consumer interests in fashion, dining, leisure, and entertainment.
JBH shares
Established in 1974, JB Hi-Fi is one of Australia’s largest retailers of electronic and home entertainment products.
The company is broadly split into three business segments, namely JB Hi-Fi Australia, JB Hi-Fi New Zealand and The Good Guys, which sells a similar range of products and was acquired in 2016.
JB Hi-Fi operates through a cost-leadership strategy meaning it competes on price against its competitors. Many of its products are often discounted resulting in much better perceived value for its customers.
SCG & JBH share price valuation
We would consider SCG 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 CY23, Scentre Group reported a debt/equity ratio of 87.3%, meaning the company has more equity than debt.
Over the last 5 years, SCG has delivered an average dividend yield of 4.8% per year. This is important to note if you’re looking for income from your investments.
Finally, in CY23, SCG reported an ROE of 1.0%. For a mature business you generally want to see an ROE of more than 10%, so SCG’s returns are a bit less than what we’d expect.
As a growth company, some of the trends we might consider from JBH 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, JBH has increased revenue at a rate of 2.5% per year to hit $9,592m in FY24. Meanwhile, net profit has fallen from $506m to $439m. JBH’s last reported ROE was 29.5%.
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 SCG or JBH shares. To learn more about valuation, check out one of our free online investing courses.
