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Highlights
Two well-known companies on the ASX — Reece (ASX:REH) and Xero (ASX:XRO) — are drawing interest for different reasons, with one known for its stability and the other for its growth trajectory.
Reece (ASX:REH): A Century of Service and Steady Returns
Reece has been a core part of Australia's infrastructure industry for over 100 years, building its reputation as the nation’s largest supplier of plumbing and bathroom products. Beyond plumbing, the company has broadened its portfolio into civil construction, pools, irrigation, and HVAC systems.
Despite a 31% decline in its share price since the beginning of 2025, Reece continues to demonstrate strong underlying fundamentals. For FY24, it posted a debt-to-equity ratio of 47.2%, showing a solid capital structure with more equity than debt. Additionally, its return on equity (ROE) came in at 11.2% — a healthy figure for a business considered mature or blue-chip. Reece has also maintained consistent dividend payouts over the years, averaging a 1.1% yield annually over the past five years.
While its dividend yield is modest, its track record of steady earnings and capital strength keeps it on the radar of long-term-focused investors.
Xero (ASX:XRO): Cloud Software Growth Engine
Founded in 2006 in Wellington, New Zealand, Xero has become a global leader in cloud-based accounting software. Its platform supports accountants and bookkeepers by enabling real-time financial visibility for small businesses and their advisors across New Zealand, Australia, the UK, and, more recently, the US.
Over the past three years, Xero has achieved significant revenue growth, averaging 26.4% annually to reach $1.71 billion in FY24. Perhaps more notably, it turned a net loss of $9 million into a net profit of $175 million during that same period. The company also reported a robust ROE of 14.3%, reinforcing its growing profitability.
Xero's trajectory reflects strong global adoption of its cloud platform and a shift in small business accounting toward digital tools.
Final Takeaway
Both Reece and Xero present contrasting yet compelling business narratives — one grounded in reliable infrastructure and the other in cloud-based innovation. Their latest financials show resilience and potential, making them worth monitoring as part of a broader ASX market perspective.
