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Highlights
- Cochlear (COH) is a global leader in hearing implants with consistent revenue growth.
- Wesfarmers (WES) holds a diverse portfolio with strong cash flow from Bunnings and other major retail brands.
- Both companies showcase solid financials, making them interesting considerations for ASX investors.
As 2025 unfolds, Cochlear (COH) and Wesfarmers (WES) remain prominent names in the Australian stock market, each with unique strengths. While Cochlear continues to drive innovation in the medical technology sector, Wesfarmers' diversified business model underpins its long-standing reputation as a stable ASX-listed company.
Cochlear (ASX:COH)
Founded in 1981 in Sydney, Cochlear is a pioneer in hearing implant technology. With over 750,000 implantable hearing devices delivered worldwide and a workforce of more than 5,000 employees across 50+ countries, the company is at the forefront of transforming lives.
Cochlear focuses on three primary types of hearing implants, catering to individuals with different levels of hearing impairment. Its consistent investment in research and development keeps it ahead in the medical device industry.
From a financial standpoint, Cochlear has demonstrated impressive growth. Since 2021, revenue has expanded at an average rate of 14.3% per year, reaching $2.23 billion in FY24. Over the same period, net profit climbed from $324 million to $357 million, while the company’s return on equity (ROE) stood at 19.9%. These figures highlight Cochlear’s ability to generate strong returns and sustain long-term growth.
Wesfarmers (ASX:WES)
Wesfarmers, headquartered in Perth, is one of Australia’s most well-established conglomerates, with interests spanning retail, chemicals, fertilizers, and industrial safety. It has built a reputation for acquiring businesses, optimizing them for growth, and strengthening its asset base.
One of the company’s most significant acquisitions was Bunnings Warehouse, now Australia’s leading hardware and home improvement brand. Wesfarmers first acquired a stake in Bunnings in 1987 before fully owning the business in 1994 for $594 million. Today, Bunnings contributes over 50% of the company’s operating profit, reinforcing its position as a key revenue driver.
Other well-known brands under Wesfarmers include Kmart, Target, Officeworks, Priceline Pharmacy, and Blackwoods. The company has maintained a strong financial track record, reporting an average dividend yield of 3.4% since 2019. In FY24, Wesfarmers’ ROE stood at 30.3%, reflecting its efficiency in generating returns for shareholders. However, it operates with a debt/equity ratio of 131.4%, emphasizing the importance of stable cash flow to manage its financial commitments.
Final Thoughts
Both Cochlear and Wesfarmers continue to stand out on the ASX for their industry leadership and solid financials. Cochlear’s innovation-driven growth and Wesfarmers’ diversified, cash-generating portfolio make them stocks to keep an eye on in 2025.
