DOW share price in focus
Downer is the leading provider of integrated infrastructure services across Australia and New Zealand, specialising in the construction, maintenance, and operation of transit systems, utility services, and public infrastructure.
While the name might not instantly recognisable, their work is highly visible. For instance, Downer operates Melbourne’s Yarra Trams and manufactures the passenger trains you see in most states.
The company’s operations are divided into three primary segments: Transport, Utilities, and Facilities. The Transport division accounts for just over 50% of Downer’s revenue, with Utilities and Facilities contributing approximately 20% and 30% respectively.
MQG shares
Macquarie Group is a multinational investment bank and financial services company that was founded in 1969.
Macquarie’s operations are a bit different to the rest of the big Australian banks. While it does have a normal banking division, it is also an asset management company with investment operations spanning infrastructure, commodities, agriculture, real estate, and global equity markets.
Macquarie prides itself on delivering consistent value to shareholders, with a more than 55-year record of unbroken profitability.
DOW & MQG share price valuation
We would consider DOW 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, Downer EDI Ltd reported a debt/equity ratio of 81.1%, meaning the company has more equity than debt.
Over the last 5 years, DOW has delivered an average dividend yield of 3.7% per year. This is important to note if you’re looking for income from your investments.
Finally, in FY24, DOW reported an ROE of 3.6%. For a mature business you generally want to see an ROE of more than 10%, so DOW’s returns are a bit less than what we’d expect.
As for Macquarie Group Ltd, they reported a debt/equity ratio of 258.5% in FY24, meaning the company is leveraged.
Since 2019 MQG has achieved an average dividend yield of 3.2% per year, and in FY24 reported an ROE of 10.4%
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.
