FLT share price in focus
Founded in Sydney in 1982, Flight Centre is a global travel agency with operations across more than 80 countries, operating under various brand names.
The company serves both the retail and corporate sectors, offering a range of services including tour operations, travel experiences, and hotel management.
Flight Centre differentiates itself by providing a personal touch that many online travel agencies can’t match. Their consultants manage all aspects of travel planning and are often able to secure exclusive deals for customers, fostering loyalty and repeat business.
STO shares
Santos Ltd is one of Australia’s largest oil and gas companies. Founded in the 1950’s, Santos owns and operates one of Australia’s largest portfolios of oil and gas fields, connected by extensive pipelines and complementary facilities.
The company started life as an exploration-focused business, and the name is an acronym for South Australia Northern Territory Oil Search.
Santos has recently faced criticism and court cases over their climate action targets, with the ACCR accusing the company of greenwashing. At present, Santos’ stated goal is to achieve net-zero Scope 1 & 2 emissions by 2040, however this does not account for Scope 3 emissions (those generated by the use of their products) which account for more than 75% of the company’s total emissions.
FLT & STO share price valuation
As a growth company, some of the trends we might investigate from FLT 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, FLT has grown revenue at a rate of 89.8% per year to reach $2,708m in FY24. Over the same stretch of time, net profit has fallen from $433m to $140m. As for ROE, FLT last reported a ROE of 11.9%.
Since STO 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 CY24, Santos Ltd reported a debt/equity ratio of 43.0%, meaning the company has more equity than debt.
As for dividends, since 2020 STO has paid an average dividend yield of 4.6% per year.
Finally, in CY24, STO reported an ROE of 8.2%. For a mature business you’re generally looking for an ROE of more than 10%, so STO’s returns are a bit less than what we’d expect.
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.
