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The share prices of CSL Ltd and Coles Group Ltd have shown notable movements recently. As ASX growth stocks, CSL Ltd has seen its share price increase by 6.6% since the beginning of 2024, while Coles Group Ltd is currently just shy of its 52-week high.
CSL Ltd (ASX:CSL) Share Price Analysis
CSL Ltd, a prominent global biotechnology company, has seen a solid rise in its share price this year. The company is renowned for developing and delivering innovative medicines that address life-threatening medical conditions and support public health. CSL’s operations are divided into three main units:
- CSL Behring: Specializes in blood plasma products and was established through the acquisition of Behring in 2004.
- CSL Seqirus: Focuses on flu-related products and pandemic services, created from the rebranding of BioCSL and the acquisition of Novartis’s flu business in 2015.
- CSL Vifor: Provides products for iron deficiency and renal care, acquired to expand CSL’s offerings in these areas.
CSL Ltd has earned a reputation among Australian investors as a reliable company with a consistent history of paying dividends. This reliability positions CSL as a strong performer in the biotechnology sector, often seen as an indirect investment in the broader healthcare cost trend.
Evaluating CSL Ltd’s performance, key metrics such as Return on Invested Capital (ROIC) and revenue growth are crucial. In FY23, CSL Ltd achieved an ROIC of 10.30%, which is commendable for a mature business. The company’s revenue growth has compounded at an impressive rate of 13.3% in recent years, reflecting its sustainable business model.
Currently, CSL shares offer a dividend yield of approximately 1.15%, which is slightly below its 5-year average of 1.28%. This lower yield indicates that CSL shares are trading below their historical dividend yield average, potentially signaling a change in investment dynamics.
Coles Group Ltd (ASX:COL) Share Price Analysis
Coles Group Ltd is a leading Australian retailer known for its wide range of products, including fresh food, groceries, general merchandise, liquor, fuel, and financial services. Established in 1914 and based in Victoria, Coles has become a staple in the Australian retail landscape.
Coles was previously part of the Wesfarmers conglomerate from 2007 until its spin-off in 2018, when it became an independent entity listed on the ASX under the ticker symbol COL. While the supermarket segment drives Coles’ earnings, the company also manages various adjacent businesses such as flybuys, Liquorland, First Choice, Vintage Cellars, and Coles Express.
Despite being considered the ‘little brother’ to Woolworths, Coles holds a significant share of the Australian grocery market, around 28%. Since becoming a standalone listed entity, Coles has established itself as a reliable dividend payer, maintaining its position as a key player in the retail sector.
To assess CSL Ltd's share price, examining the dividend yield over time provides a useful gauge. Currently, CSL Ltd's dividend yield stands at about 1.15%, compared to its 5-year average of 1.28%. This historical comparison indicates that CSL shares are trading below their usual dividend yield, reflecting broader market conditions and company performance.
CSL Ltd and Coles Group Ltd both demonstrate strong positions in their respective industries, with CSL focusing on biotechnology and Coles on retail. Their recent share price movements and dividend yields offer insights into their financial health and market standing.
