QAN share price in focus
Founded in 1921, Qantas is Australia’s largest airline operator, with the biggest fleet, the most international flights, and the widest range of destinations.
The airline operates both domestic and international flights, offers freight services, and manages the popular Frequent Flyer loyalty program.
Additionally, Qantas owns Jetstar, giving it considerable pricing and market influence within the highly concentrated Australian airline industry.
SOL shares
Washington H. Soul Pattinson (WHSP) is a diversified investment company with a portfolio of assets across a range of industries and asset classes.
Some of SOL’s largest holdings include stakes in other well-known publicly listed companies such as TPG Telecom (ASX: TPG), New Hope Group (ASX: NHC) and a cross-shareholding in Brickworks (ASX: BKW).
SOL’s aim is to deliver superior returns to its shareholders by creating capital growth and steadily increasing dividends as a holding company. As the second-oldest publicly listed company on the ASX it has developed a strong track record of doing just that. In fact, SOL has never missed a dividend payment since listing in 1903! It could best be thought of as a family-run LIC with directors that are financially aligned with shareholders.
QAN & SOL share price valuation
As a growth company, some of the trends we might investigate from QAN 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, QAN has grown revenue at a rate of 54.6% per year to reach $21,939m in FY24. Over the same stretch of time, net profit has increased from -$1,692m to $1,255m. As for ROE, QAN last reported a ROE of 823.0%.
Since SOL 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, Washington H Soul Pattinson & Company Ltd reported a debt/equity ratio of 8.5%, meaning the company has more equity than debt.
As for dividends, since 2020 SOL has paid an average dividend yield of 2.4% per year.
Finally, in FY24, SOL reported an ROE of 5.6%. For a mature business you’re generally looking for an ROE of more than 10%, so SOL’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.
