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The share prices of REA Group Ltd and BHP Group Ltd have exhibited distinct trends in 2024. With REA Group showing an 11.8% increase and BHP Group’s share price remaining 23.8% below its 52-week high, both companies offer intriguing prospects for investors. Here’s a closer look at why these stocks might be worth considering for an ASX growth stock watchlist.
REA Group Ltd (ASX:REA)
REA Group, established in 1995 and headquartered in Melbourne, is a prominent player in real estate advertising. The company is majority-owned by News Corp and is renowned in Australia for its Realestate.com.au platform.
Globally, REA Group operates property websites in approximately 10 countries, serving around 20,000 agents. Its Australian website alone attracts over 55 million visits monthly, underscoring its dominant market position. While REA Group’s global expansion is significant, Australian operations remain the primary revenue driver. The company generates income through property listings and a smaller segment of financial services, such as mortgage broking.
REA Group’s competitive edge lies in its established platform, benefiting from network effects and economies of scale. Compared to Domain, the second-largest player in the market, REA Group enjoys superior user engagement and market influence. Its diversified business model includes listings, advertising, mortgage broking, and house sharing, further solidifying its market leadership.
BHP Group Ltd (ASX:BHP)
BHP Group, originally known as BHP Billiton, is a long-standing entity in the natural resources sector, dating back to 1885. The company engages in mineral exploration and production, with a focus on commodities used in energy and manufacturing, and is expanding into fertilizers.
BHP’s operations are segmented into three main areas: copper and related minerals (including gold, uranium, silver, and zinc); iron ore; and coal (both metallurgical and energy coal). Known for its reliability in dividend payments, BHP is a staple in many ASX portfolios. Investors in popular ETFs or industry superannuation funds likely have exposure to BHP shares.
Valuation Insights
For REA Group, a useful valuation metric is the price-to-sales ratio. Currently, REA Group shares have a price-to-sales ratio of 16.16x, slightly below its 5-year average of 16.25x. This suggests that the shares are trading near their historical average, providing context for potential investment decisions.
With REA Group’s share price climbing 11.8% in 2024 and BHP Group’s shares trading significantly below their recent highs, both companies offer unique investment opportunities. REA Group’s strong position in real estate advertising and BHP Group’s established role in natural resources make them notable considerations for those looking to diversify their ASX investments.
