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Highlights
- Brambles (BXB) offers global logistics support through a reusable pallet system
- Cochlear (COH) leads in hearing implants with a wide global footprint
- Valuation metrics suggest both BXB and COH are trading below historical averages
Understanding how to assess the value of a stock doesn’t have to be complicated. Two well-established ASX-listed companies—Brambles (BXB) and Cochlear (COH)—offer good case studies for a straightforward approach using basic valuation indicators.
Brambles (ASX:BXB): Logistics Backbone of the Supply Chain
Brambles is a global player in supply chain logistics, best known through its CHEP brand. Operating the largest pool of reusable pallets, crates, and containers, Brambles services industries across the Asia-Pacific, Americas, and EMEA regions.
Its business model revolves around daily hire fees collected for the use of its pallets and containers. Each time a pallet moves from a manufacturer to a retailer or to another step in the supply chain, Brambles earns a fee. This circular, sustainable model has allowed Brambles to maintain a stable stream of recurring revenue.
A simple way to look at how BXB shares are valued today is through their dividend yield. The current yield stands at approximately 2.21%, slightly below the company’s five-year average of 2.66%. A lower yield could mean the share price has appreciated, or it could indicate a dip in payouts. However, the latest annual report shows dividend growth over the past three years, pointing to increasing shareholder returns.
Cochlear (ASX:COH): A Global Force in Hearing Innovation
Cochlear, founded in Sydney in 1981, specializes in hearing implants and is a recognized leader in medical devices for auditory health. The company has helped over 750,000 individuals worldwide and operates in more than 50 countries with a workforce exceeding 5,000.
Given its positioning as a growth-focused healthcare company, Cochlear’s valuation can be better understood through the price-to-sales (P/S) ratio. The current P/S ratio is 7.97x, compared to its five-year average of 9.18x. This suggests that the shares may currently be trading at a more favorable valuation relative to their revenue.
A Quick Read on Long-Term Value
While these valuation metrics are not definitive on their own, they offer a solid foundation for further analysis. Brambles’ steady dividend growth and Cochlear’s reduced P/S ratio could indicate financial health and investor confidence. Looking at long-term averages can help simplify complex financial decisions and offer insights into where the companies currently stand in their respective journeys.
Understanding key metrics like dividend yields and price-sales ratios provides a quick, useful lens through which to explore value—especially for companies with consistent operational footprints like Brambles and Cochlear.
