JHX share price in focus
James Hardie Industries is a building solutions company and the world’s largest producer of fibre cement and gypsum products.
The company operates across North America, Europe, Australia, and New Zealand with a team of more than 5,200 employees.
The main selling point of fibre cement for buildings is that the product doesn’t burn, is resistant to water and termite damage, and is durable and requires low maintenance.
CSL shares
CSL is a global biotechnology company that creates and delivers life-saving medicines, aiming to protect public health and improve the quality of life for those with life-threatening conditions.
The company operates through three main divisions: CSL Behring, CSL Seqirus, and CSL Vifor. Behring, acquired in 2004, focuses on manufacturing and distributing blood plasma products. Seqirus, formed from the rebranding of BioCSL and the acquisition of Novartis’ flu business in 2015, develops flu-related products and provides pandemic-related services to governments. Vifor specializes in products for iron deficiency and nephrology (renal/kidney care).
CSL has built a strong reputation among Australian investors for its reliability and consistent dividend payouts, making it a popular choice for those seeking exposure to the growing healthcare sector. Many view CSL as an indirect investment in the rising global demand for healthcare.
JHX & CSL share price valuation
As a growth company, one way to put a broad estimate on the JHX share price could be to compare its price-to-sales multiple over time. This can tell us how the company has historically been valued relative to its total revenue.
Currently, James Hardie Industries plc shares have a price-sales ratio of 1.69x, compared to its 5-year average of 4.14x, meaning its shares are trading lower than their historical average. This could mean that the share price has fallen, or sales have increased, or both. In the case of JHX, revenue has been growing over the last 3 years. Of course, context is important – and this is just one valuation technique. Investment decisions can’t just be based on one metric, but this can be a rough starting point.
Since CSL is more of a ‘blue chip’ company, we could look at its dividend yield to determine its value. If we compare it to the historical dividend yield, we can get a sense of the stability of the company and its ability to pay out income. CSL is paying a trailing dividend yield of around 1.70%, which compares to its 5-year average of 1.50%. This is just one of many ways you could put a value on CSL shares. The Rask websites offer free online investing courses, created by analysts explaining valuation methods like Discounted Cash Flow (DCF) and Dividend Discount Models (DDM). They even include free valuation spreadsheets which can help you learn how to value a company like JHX or CSL.
