Why Woolworths and Aristocrat Leisure Could Be Worth Watching in 2025

June 19, 2025 11:47 AM AEST | By Team Kalkine Media

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Why Woolworths and Aristocrat Leisure Could Be Worth Watching in 2025 — Image source: shutterstock

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Highlights

Woolworths (WOW) shows strength in retail resilience

Aristocrat Leisure (ALL) demonstrates steady growth in digital and gaming segments

Both stocks remain key contenders within ASX200 stocks

Investors keeping a close eye on ASX200 stocks have seen some interesting movements in 2025. Among the standout names are Woolworths Group Ltd and Aristocrat Leisure Ltd — both of which offer unique exposure to defensive and growth-oriented segments of the economy.

Woolworths (ASX:WOW): A Cornerstone of Stability

Founded over a century ago, Woolworths stands as one of the largest retail groups in Australia and New Zealand. Operating under brands such as Woolworths, Big W, and Countdown, the company runs over 3,000 stores and employs more than 100,000 people.

Woolworths’ dominant position — especially its 35%+ market share in the Australian grocery sector — gives it considerable pricing power and logistical advantages. The group has also built a reputation for generating stable, recurring revenues thanks to its consumer staples focus. This makes it an appealing option for those seeking exposure to sectors with lower economic sensitivity.

In FY24, Woolworths reported a debt-to-equity ratio of 300.2%. While this suggests a high degree of leverage, its consistent earnings from everyday essentials provide a cushion to manage debt obligations. The average dividend yield over the last five years has been around 2.9%, supported by fully franked distributions. However, its return on equity (ROE) for FY24 stood at 1.9%, which is lower than what is typically expected from a mature business.

Aristocrat Leisure (ASX:ALL): A Play on Digital Gaming Growth

Aristocrat Leisure began as a gaming machine manufacturer and has evolved into a global leader in electronic gaming. With nearly half of its revenue now coming from digital mobile games, the company is successfully diversifying its business model.

Revenue growth has been notable. Over the last three years, Aristocrat Leisure has expanded its top line at an annual rate of 11.7%, reaching $6.6 billion in FY24. Net profit surged from $820 million to $1.3 billion over the same period. The company also reported an ROE of 20.0%, suggesting strong capital efficiency, especially for a company reinvesting in high-growth areas.

For those exploring diversified exposure in the ASX200 stocks landscape, these two companies bring contrasting but compelling qualities. Woolworths offers defensive income characteristics, while Aristocrat brings scalable growth through its global gaming and digital entertainment portfolio.

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