WOW and RMD: ASX Bluechip stocks under the spotlight

5 min read | July 03, 2024 09:21 PM AEST | By Team Kalkine

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WOW and RMD: ASX Bluechip stocks under the spotlight — Image source: whiteMocca|Shutterstock

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Highlights

RMD reported a 12% YoY revenue increase in 9MFY24.

In 3QFY24, RMD’s revenue, net income, and operating cash flow surged by around 7%, 29%, and 42%, respectively.

WOW reported 2.8% group sales growth in 3QFY24, driven by eCom sales.

Bluechip stocks belong to companies that typically have strong financials, substantial market capitalisations in the billions, and are prominent players in their respective industries. Known for their enduring presence and global recognition, bluechip stocks generally distribute regular dividends, making them desirable to income-focused investors seeking reliable returns. This article discusses two bluechip stocks listed on the ASX.

ResMed Inc. (ASX: RMD)

ResMed specialises in digital health technologies and cloud-connected medical devices. The company’s products and services are tailored for individuals with conditions such as sleep apnoea and chronic obstructive pulmonary disease (COPD). As of 3 July 2024, the company has a market capitalisation of AUD 41.61 billion.

During the first nine months of FY24 ended 31 March 2024, RMD reported a 12% year-over-year rise in revenue and a 9% increase in net income. Additionally, RMD achieved a fixed asset turnover ratio of 1.72x in 1HFY24, surpassing the industry median of 1.03x.

Historical financial trend

Recent business update - In 3QFY24, the company’s revenue, net income, and operating cash flow jumped by around 7%, 29%, and 42%, respectively. The revenue growth was propelled by heightened demand for sleep devices and mask products. Meanwhile, the notable increase in net income primarily stemmed from its sales performance and improved gross margins.

Outlook – The company is dedicated to broadening its range of digital health technologies, improving patient monitoring capabilities, and expanding Software-as-a-Service (SaaS) solutions for out-of-hospital care environments. Emphasising geographic growth and raising public and clinical awareness, the company seeks to bolster its worldwide footprint while maintaining innovation in the fields of sleep apnoea and respiratory care.

Stock performance – The stock price of RMD has tumbled by around 8.89% in the past month. However, the stock price has surged by around 12.80% in the past six months.

Data source: EODHD/Others as of 03 July 2024

Woolworths Group Limited (ASX: WOW)

WOW is involved in retail operations. Its segments include Australia Food, New Zealand Food, Endeavor Drinks, BIG W, and Hotels. As of 03 July 2024, the company has a market cap of AUD 40.67 billion.

In 3QFY24, the company’s group sales jumped by 2.8% compared to pcp. Similarly, group eCom sales surged by 17.6%. According to the company, in the Australian Food sector, total sales rose by 1.5%. Woolworths Food Retail's adjusted total sales similarly increased by 1.5%. This sales growth was influenced by several factors, including an impressive Q3FY23 (7.6%), a material moderation in inflation (-0.2% in Q3 FY24 compared to 5.8% in Q3 FY23), and the impact of cycling collectibles.

Recent business update- On 18 June 2024, WOW announced that 1,797 fully paid ordinary securities were issued under the NED Equity plan on 14 June 2024.

Outlook – WOW expects growth in earnings before interest and taxes (EBIT) in 2HFY24 could be less than 1HFY24. For the Big W segment, WOW anticipates EBIT to be approximately at breakeven levels in 2HFY24.

Stock performance – The stock price of WOW has surged by around 6.10% in the past month whereas, it has tumbled by around 10.76% in the past six months.

WOW Daily Technical Chart (Data source: EODHD/Others as of 03 July 2024)

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 3 July 2024. The reference data in this report has been partly sourced from EODHD/Others.

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This article has been prepared by Kalkine Media, echoed on the website kalkinemedia.com/au and associated pages, based on the information obtained and collated from the subscription reports prepared by Kalkine Pty. Ltd. [ABN 34 154 808 312; AFSL no. 425376] on Kalkine.com.au (and associated pages). The principal purpose of the content is to provide factual information only for educational purposes. None of the content in this article, including any news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations, and video is or is intended to be, advisory in nature. The content does not contain or imply any recommendation or opinion intended to influence your financial decisions, including but not limited to, in respect of any particular security, transaction, or investment strategy, and must not be relied upon by you as such. The content is provided without any express or implied warranties of any kind. Kalkine Media, and its related bodies corporate, agents, and employees (Kalkine Group) cannot and do not warrant the accuracy, completeness, timeliness, merchantability, or fitness for a particular purpose of the content or the website, and to the extent permitted by law, Kalkine Group hereby disclaims any and all such express or implied warranties. Kalkine Group shall NOT be held liable for any investment or trading losses you may incur by using the information shared on our website.

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