The Woolworths Group Limited (ASX:WOW) share price has gained 37 cents or 1.20 per cent on Wednesday, with WOW shares trading at $31.21 as at 13:02.
Today’s move in the Woolworths Group Limited share price comes on a tough day for the stock market, with the S&P/ASX 200 Index losing 43.10 points or 0.69 per cent to trade at 6215.00.
It has been a great 12 months for shareholders in the Woolworths Group Limited.
Over the past year the Woolworths Group Limited share price has gained 21.2 per cent. This compares favourably to gains of 7.82 per cent for the S&P/ASX 200 Index over the same period.
The stock is currently trading above its 52 week range.
Woolworths Group Limited Revenue profile
Revenue growth gives a good indication of a company’s health.
From an investing perspective, ideally you want to see a company that is growing its revenues year over year.
That said, some companies can have lumpy revenue profiles, especially mining shares, who are subject to the vagaries of underlying commodity prices.
Other reasons why companies may not be growing revenues include size, sector and competition. Even the very best companies can have setbacks!
Woolworths Group Limited Dividends
A dividend payment is a way for shareholders to share in a company’s profits.
Many profitable ASX companies pay dividends, usually in the form of an interim dividend and a final dividend. Some companies also pay special dividends.
Some loss-making companies and fast growing companies don’t pay dividends.
Looking at Woolworths Group Limited, over the over the past 12 months the company has paid dividends of 93.00 cents per share. With Woolworths Group Limited shares currently trading at $31.21, WOW shares trade on a dividend yield of 2.98 per cent.
Woolworths Group Limited Valuation
The price to earnings ratio (P/E) is commonly used to measure a company’s value.
Put simply, if a company is currently trading at a multiple (P/E) of 24, the interpretation is that an investor is willing to pay $24 today for $1 of current earnings.
The lower a company’s P/E ratio, generally the cheaper the company.
That said, there is no hard and fast rule for valuing a company. A company with a low P/E ratio may be a lower quality company, or about to downgrade its earnings. A company with a high P/E ratio may be a fast growing company with a long growth runway ahead.
Woolworths Group Limited shares currently trade on a trailing P/E ratio of 26.01 times earnings. The company has a current market capitalisation of $40.40 billion.
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The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.