2 Stocks With Growth And Value-Driven Attributes - REA And WEB

  • Jun 01, 2019 AEST
  • Team Kalkine
2 Stocks With Growth And Value-Driven Attributes - REA And WEB

Stocks with strong fundamental tend to attract the investors for growth in the portfolio and to alleviate the risk level. Two such growth stocks are REA Group Limited (ASX: REA) and Webjet Limited (ASX: WEB) which possess high potential to create value in the long run. Let’s see how these stocks performed based on their recent updates.

REA Group Limited (ASX: REA)

REA Group Limited (ASX: REA) offers property-related services on mobile apps and websites in Asia and Australia. The company recently announced financial numbers for three months and nine months ended 31st March 2019. The Group posted revenue growth of 13% to $667.8 million and EBITDA growth from core operations of 15% to $404.7 million for the period.

The strong results were largely driven by the strength witnessed by the Australian Residential and Developer businesses, and the inclusion of the Hometrack business, which was not present in the results of the prior comparative period. The Group has delivered such performance in a challenging environment with a significant decline in new residential listing volume and new project commencement. The company remains focused on supporting its customers, which has been showcased by depth penetration coming to record levels in Q3 FY19.

Outlook: Given the unusual market circumstances, the management expects the fourth quarter to record a lower rate of growth as compared to the third quarter of FY19, while growth in expenses is also expected to be lower as compared to Q3. The group believes that the rate of revenue growth is still likely to exceed the rate of cost growth for FY19. Moreover, these expectations in terms of growth rates will be broadly similar in the second half.

At the current market price of $88.980, the annual dividend yield for the stock comes in at 1.32%.

Webjet Limited (ASX: WEB)

Webjet Limited (ASX: WEB) is engaged in the online sale of travel products, including flights and hotel rooms. The Group consists of a B2C division and a B2B division (WebBeds).

B2C Division: In this segment, Webjet has been enjoying its leadership position as the Number One OTA (Online Travel Agency) in Australia and New Zealand. Whereas, Online Republic, acquired by Webjet, is a market-leading specialist for the online cruise, rental car and motorhome bookings.

B2B Hotels Division: WebBeds, which was launched in 2013, is the world’s second largest accommodation supplier to the travel industry.

The company has delivered a record 1H FY19 performance with a 42% growth in EBITDA to $58.0 million. Revenues also posted an exuberant growth of 33% to $175.3 million in H1 FY19. Net profit after tax recorded a growth of 61% to $38.3 million, prior to acquisition amortisation.

The company demonstrated excellent performance with WebBeds business consolidating its position as the second largest global B2B player. With the acquisitions of DOTW (Destinations of the World) and JacTravel, the scale and size of the company’s business has increased. With this, WEB has shifted its attention towards chasing more profitable growth from the increasing market share. As a result, the company witnessed increased TTV and EBITDA margins in all regions. The Webjet continued the trend of increasing its market penetration level without affecting much from a slower domestic flight market.

As of 31st May 2019, the stock of WEB was trading at $14.850, down 0.067%, with a market cap of $2.02 billion.


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