REH shares: your next blue chip investment?

The Reece Ltd (ASX:REH) share price is down 37.0% since the start of 2025. It's probably worth asking, 'is the REH share price undervalued?'
The Reece Ltd (ASX:REH) share price is down 37.0% since the start of 2025. At the same time, the Hub24 Ltd (ASX:HUB) share price is 36.4% away from its 52-week high. This brief article explains why it could be worth adding REH and HUB shares to your ASX investing stock watchlist.

REH share price in focus

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.

HUB shares

HUB24 is a leading player in the wealth management software industry, offering diversified solutions across financial advice, superannuation, and investment management.

HUB24’s three main products are its platforms HUB24, Class, and myprosperity. The HUB24 platform is designed for financial advisers and their clients, providing access to a range of managed funds and investment products. Class is a leading software for self-managed super funds to manage portfolios, legal documentation, and compliance. myprosperity is focused on accountants and advisers, enabling them to provide an enhanced service and customer experience.

HUB24’s competitive advantage is in the quality of its service. In 2024 they were awarded Overall Best Platform in the Adviser Ratings Financial Advice Landscape Report, and ranked first for Overall Satisfaction and Brand Image and Reputation in the 2024 Wealth Insights Platform Service Level Report.

REH & HUB share price valuation

We would consider REH 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, Reece Ltd reported a debt/equity ratio of 47.2%, meaning the company has more equity than debt.

Over the last 5 years, REH has delivered an average dividend yield of 1.1% per year. This is important to note if you’re looking for income from your investments.

Finally, in FY24, REH reported an ROE of 11.2%. For a mature business you generally want to see an ROE of more than 10%, so REH clears this hurdle.

As more of a growth company, some of the trends we might consider for HUB 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 a much more valuable figure than a single measure at one point in time.

Over the last 3 years, HUB has increased revenue at a rate of 44.4% per year to hit $328m in FY24. Meanwhile, net profit has increased from $10m to $47m. As for ROE, HUB’s last reported figure was 9.2%.

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 REH or HUB shares. To learn more about valuation, check out one of our free online investing courses.

Better investing starts here.

Want to level-up your analytical skills and investing insights but don’t know where to start? Join 50,000 Australian investors on our mailing list and we’ll send you our favourite podcasts, courses, resources and investment articles every Sunday morning. Grab a coffee and let Owen and the team bring you the best  insights.

5%+ in passive income

Owen Rask’s investing report available

With bond ETFs like ASX:IAF and the S&P 500 riding high, now could be one of the best times to start earning passive income from a portfolio of shares and ETFs.

In this free analyst report, our Chief Investment Officer, Owen Rask, names 10 ASX stocks and ETFs to watch.

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Skip to content