The ASX share market is full of interesting potential investments. With a few of them, I'd describe them as one of Australia's top shares and worth buying.
If we consider the last 30 years, it's not common for the Reserve Bank of Australia (RBA) to hike as many times as it has in one year.
This year, the cash rate has gone from 3.60% to 4.60%. It's also possible the RBA could hike again to 4.85% in November to try to tame inflation. That has negatively impacted valuations across a number of Australian businesses, including Propel – the funeral operator's share price has fallen 45% over the past year.
Interest rates act like gravity on valuations, the higher rates go, the harder it pulls down on valuations.
In my view, Propel Funeral Partners Ltd (ASX: PFP) is one of the ASX's leading opportunities because of the exposure to a long-term tailwind and how much cheaper it has become.
Image source: Getty Images
Long-term tailwind
I'm sure every company wants to grow revenue over time. It's a lot easier to increase its top line when there's a compelling demand tailwind.
Propel Funeral Partners is the second-largest funeral provider across Australia and New Zealand. It currently operates from 213 locations, including 42 cremation facilities and nine cemeteries.
While it's a morbid idea, it comes with a very long-term tailwind of projected increasing death volumes.
According to the Australian Bureau of Statistics (ABS), projected deaths are expected to rise at a compound annual growth rate (CAGR) of 2.8% between 2026 and 2035 and then a further CAGR of 2.3% between 2036 and 2045. In other words, that's essentially two decades of expected growth of the industry. Not many of Australia's other top shares can point to growth like that.
Despite being the number two player in the industry, it's a highly fragmented industry – the company's market share was only around 10% as at June 2026, according to Propel. Since the start of FY26, it has completed five acquisitions costing about $12 million, adding 10 locations and about $8 million in annual revenue, at a price-to-sales multiple of 1.5x.
I believe the business is likely to continue enacting bolt-on acquisitions in the coming years, expand its geographic exposure and increase its scale benefits.
Additionally, the company's revenue is getting a boost from inflation because the average revenue per funeral continues to climb. In August, the company noted that the month of July 2026 saw comparable average revenue per funeral growth of more than 3%.
Why one of Australia's top shares looks so appealing
According to the projection on CMC Invest, the business could generate earnings per share (EPS) of 15.9 cents. I calculate it's trading at 17x FY28's estimated earnings at a Propel Funeral Partners share price of $2.64. This came after a 45% decline in the past year.
According to CMC Invest, it had an average annual price/earnings (P/E) ratio of 29 in FY26, and it was above 30 in FY25 and FY24. I think it looks very cheap based on FY28's projected earnings, so an investment now could be very rewarding in two or so years. Additionally, it's forecast to pay an annual dividend per share of 14.9 cents in FY28.
According to my calculations, that's a dividend yield of 5.6% excluding franking credits and 8% including franking credits, at the time of writing. That's a very appealing potential yield, in my view.
