Pro Medicus and Washington H Soul Pattinson Shares Draw Attention

3 min read | September 02, 2024 02:54 PM AEST | By Team Kalkine Media

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Pro Medicus and Washington H Soul Pattinson Shares Draw Attention — Image source: shutterstock

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Pro Medicus Limited has been a standout performer in 2024, with its share price surging by an impressive 56.5% since the beginning of the year. Meanwhile, Washington H Soul Pattinson & Company Ltd, an ASX value stock, is closing in on its 52-week high, sitting just 3.9% away from this milestone. Both companies have unique strengths that make them worth keeping an eye on.

Pro Medicus Limited (ASX:PME)

Founded in 1983, Pro Medicus is a global leader in radiology IT software, catering to hospitals, imaging centers, and healthcare groups worldwide. The company's product portfolio includes Radiology Information Systems (RIS), Picture Archiving and Communication Systems (PACS), and advanced visualization solutions. These products support various functions from patient scheduling and billing to rapid medical imaging interpretation and analysis.

A key driver behind Pro Medicus’s success is its flagship Visage software, which allows radiologists to remotely view large image files generated by X-rays on mobile devices. This capability facilitates quick diagnostic decisions, ideally leading to better patient outcomes.

Pro Medicus is often considered a growth stock due to its ability to rapidly expand its revenue. Over the years, the company has demonstrated a robust top-line revenue growth of 33.4%, which is a key factor in its strong share price performance.

Washington H Soul Pattinson (ASX:SOL)

Founded in 1903, Washington H Soul Pattinson (WHSP) is one of Australia’s oldest investment companies, boasting a diversified portfolio across various industries and asset classes. Some of its most significant holdings include stakes in publicly listed companies such as TPG Telecom (ASX:TPG), New Hope Group (ASX:NHC), and a cross-shareholding in Brickworks (ASX:BKW).

WHSP’s mission is to generate superior returns for its shareholders through capital growth and consistent dividend payments. As the second-oldest publicly listed company on the ASX, WHSP has a remarkable track record of delivering capital growth and dividends, having never missed a dividend payment since its listing in 1903. The company operates similarly to a family-run Listed Investment Company (LIC), with a strong alignment between management and shareholders.

As a growth-focused company, Pro Medicus requires a unique approach to valuation. One method is to examine its price-to-sales (P/S) ratio over time. Currently, Pro Medicus shares have a P/S ratio of 97.51x, which is higher than its five-year average of 85.76x. While this suggests that the shares are trading above their historical average, it is important to consider this within the broader context. Valuation metrics are just one piece of the puzzle when evaluating a company, and decisions should be based on a comprehensive analysis of various factors.

Both Pro Medicus and Washington H Soul Pattinson present compelling stories in 2024. Pro Medicus stands out for its innovative healthcare solutions and impressive revenue growth, while Washington H Soul Pattinson continues to build on its legacy of consistent capital growth and dividend payments. These companies offer unique strengths that could make them interesting additions to any watchlist.

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