Kick Off: Computershare Limited v Brambles Limited

Two strong businesses go head to head in the quest to be called the ASX World Champion!

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Welcome to this ASX World Cup group game between Computershare Limited (ASX: CPU) and Brambles Limited (ASX: BXB). Two top teams all investors should take a close look at.

Pre-match commentary and stats

Financial services business Computershare is up more than 20% over the last year, while pallets and packaging business Brambles' share price has been up over 11%, compared to the S&P/ASX 200 Index's (INDEXASX:XJO) 15% rise. Some key stats are given below.

Computershare Brambles
Code ASX:CPU ASX:BXB
Recent Price $12.55 $9.21
Market Capitalisation $6.99 billion $14.13 billion
Dividend Yield / Franking 2.4% | 20% 3.0% | 30%
Projected P/E ratio 2015 17.2 18.6
Price-Book ratio 5.79 4.32

Source: Morningstar / Thomson Consensus Estimates.

Let's look at the companies fundamentals, Computershare is a dominant player in its field of share registry and transaction services, with more than 70% of its revenue estimated to be recurring, it has steady cash flow and fat profit margins. The sticky client base and size advantage give this team a sustainable competitive advantage over rivals and all this means Computershare scores an early goal!

Packaging and containers business Brambles is another fine team, with global reach, defensive revenue streams and high margins. Like Computershare it has competitive advantages by virtue of its size and market position, a great team worthy of fans' attention. Its own fundamentals mean it levels the scores at 1-1.

Computershare has a slightly lower estimated forward price-earnings of the two, and a far lower price-earnings to growth (PEG) ratio, value-oriented investors may see an opportunity there, and Computershare strikes again. 2-1 to Computershare on value.

Both teams are hard to separate on dividend yields so let's look at the all important outlook. With interest rates at record lows in Computershare's major North American and European markets, any eventual rise in them should greatly benefit Computershare's bottom line due to income the company earns on funds it holds for clients. Brambles should also benefit from the much anticipated pickup in advanced economies, but probably not to the extent Computershare will. Computershare scores on outlook as well to run out a 3-1 winner.

Are you looking for consistent income in retirement?

Motley Fool contributor Tom Richardson has no financial interest in any company mentioned. The Motley Fool owns shares in Computershare. You can find Tom on Twitter @tommyr345

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »