JHX share price in focus
James Hardie Industries is a leading building solutions company and the world’s largest producer of fibre cement and gypsum products.
With operations spanning North America, Europe, Australia, and New Zealand, the company employs over 5,200 people.
Fibre cement is a popular choice for building materials due to its non-combustible nature, resistance to water and termite damage, durability, and low maintenance requirements.
CSL shares
Previously a government body, CSL is today a publicly-listed global biotechnology company that develops and delivers innovative medicines that save lives, protect public health, and help people with life-threatening medical conditions live full lives.
The company is divided into three core business units: CSL Behring, CSL Seqirus and CSL Vifor. Behring, acquired in 2004, manufactures and distributes blood plasma products. Seqirus is responsible for making flu-related products and performs pandemic-related services for governments. Finally, Vifor makes products for iron deficiency and nephrology (renal/kidney care).
CSL has developed a strong reputation with Australian investors over many decades as being a reliable company and a consistent dividend payer. With the continual rise in healthcare costs and the consistent historical performance, interest in CSL shares remains high today.
JHX & CSL share price valuation
As a growth company, some of the trends we might investigate from JHX 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, JHX has grown revenue at a rate of 10.6% per year to reach $3,936m in FY24. Over the same stretch of time, net profit has increased from $263m to $510m. As for ROE, JHX last reported a ROE of 29.4%.
Since CSL 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 FY24, CSL Ltd reported a debt/equity ratio of 62.8%, meaning the company has more equity than debt.
As for dividends, since 2020 CSL has paid an average dividend yield of 1.5% per year.
Finally, in FY24, CSL reported an ROE of 14.6%. For a mature business you’re generally looking for an ROE of more than 10%, so CSL 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.
