An Examination of XRO Shares as a Growth Candidate

October 17, 2024 03:39 PM AEDT | By Team Kalkine Media

Google News:

An Examination of XRO Shares as a Growth Candidate — Image source: Shutterstock

Recent News

Potential fee misses at Nordic banks may catch attention this quarter...

Banks Drive ASX 200 as Miners Retreat on Commodity Weakness

Airbus notches $21 bn in orders at Paris Air Show while Boeing keeps l...

Energy and Healthcare Stocks in Focus on the ASX 200 Amid Market Volat...

Highlights:

Xero Ltd has experienced a significant share price increase of 32.6% since the start of 2024, reflecting strong market performance.

Washington H Soul Pattinson & Company Ltd is currently 4.1% away from its 52-week high, indicating sustained investor interest.

Key financial metrics for Xero highlight robust growth, while Washington H Soul Pattinson offers stability and a long-standing history of dividend payments.

Xero Ltd (ASX:XRO) , founded in 2006 in Wellington, New Zealand, provides cloud-based accounting software designed primarily for accountants and bookkeepers. With over 3,000 employees, Xero caters to millions of subscribers worldwide, offering solutions that help manage accounting and tax obligations efficiently. The platform provides real-time financial data accessible on any device, enhancing the service small business owners receive from their accountants.

The company has shown impressive financial growth, with revenue increasing at a compound annual growth rate (CAGR) of 26.4%, reaching AU$1,714 million in FY24. Additionally, net profit surged from a loss of AU$9 million to a profit of AU$175 million over the same period. The return on equity (ROE) for Xero stands at 14.3%, underscoring its capacity to generate value from shareholder equity.

On the other hand, Washington H Soul Pattinson & Company Ltd has a rich history dating back to 1903 and operates as an investment company with a diversified portfolio across various industries. Key holdings include stakes in notable companies such as TPG Telecom, New Hope Group, and Brickworks. SOL aims to deliver capital growth and consistent dividends, boasting a remarkable record of never missing a dividend payment since its inception.

In FY24, SOL reported a debt-to-equity ratio of 8.5%, reflecting a sound financial structure with more equity than debt. The average dividend yield since 2019 is 2.4%, providing a steady income stream for shareholders. However, its ROE of 5.6% falls below the typical expectation of 10% for mature businesses, indicating a potential area for improvement.

While both Xero and Washington H Soul Pattinson offer distinct value propositions, their contrasting profiles—one as a high-growth technology company and the other as a stable, mature investment vehicle—make them worth monitoring for those interested in diverse opportunities within the ASX. Continued analysis of financial metrics and market conditions will further clarify their respective potential.

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.