Wesfarmers Limited ASX:WES (WES)
Wesfarmers is a strong and diversified business with a solid financial foundation. With a market capitalization of $53.94 bn AUD, it operates in various retail sectors, including building materials, home and garden improvement, outdoor living products, apparel and general merchandise, office products and solutions, and pet care.
The recent news of Bunnings, owned by Wesfarmers, expanding into the pet care market shows the company’s focus on growth opportunities. This move puts Wesfarmers in direct competition with Woolworths Group Ltd in the pet care category.
WES’s diversified business model is reflected in its strong financial metrics, including a 34% gross margin, a 6% net operating margin, and a net income of $2.5 bn AUD for the last 12 months.
Regarding analysts’ ratings, Wesfarmers has a high StockRank rating of 92 out of 100, which is indicative of the company being a premier large market capitalization business.
The company’s latest half-year results showed a net profit after tax of $1.384 bn AUD, up 14.1% from the corresponding prior period, with Kmart and Target performing well. Additionally, the company increased its interim fully franked dividend by 10% to 88 cents a share.
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Overall, Wesfarmers appears to be a robust and diversified company with a solid financial foundation and a focus on growth opportunities. While there may be some competition in certain sectors, such as pet care, the company’s diversified business model provides it with strength and stability. As such, Wesfarmers could be an attractive investment opportunity for those seeking a stable and diversified business with solid financials.
QBE Insurance Group Limited ASX:QBE (QBE)
QBE Insurance Group Limited, a global insurer headquartered in Sydney, recently reported positive financial results for the year ending December 31, 2022.
The company’s net profit after income tax increased from $750 m AUD in FY21 to $770 m AUD in FY22, and its adjusted cash profit after tax grew from $805 m AUD to $847 m AUD. Gross written premium (GWP) also increased from $18.5 bn AUD in FY21 to $20 bn AUD in FY22, with all three of QBE’s divisions contributing to the growth.
Despite a potential hit to earnings from bad weather pushing up catastrophe costs, TheBull.com.au retained a hold recommendation on QBE’s stock in December 2022. This decision was vindicated by the company’s positive financial results, including a higher dividend and increased premiums.
QBE’s adjusted combined operating ratio of 93.7% demonstrated improved resilience in the face of heightened inflation, geopolitical tensions, and elevated catastrophe activity.
QBE Europe recently revamped its cyber portfolio leadership, appointing Erica Kofie as head of cyber proposition and David Warr as a cyber portfolio manager. The company continues to see cyber as a significant opportunity and aims to support customers with market-leading propositions.
However, QBE shareholders may have noticed that the Group CEO & Executive Director, Andrew Horton, recently sold $428k AUD worth of stock, representing 12% of his holding. While this sale may raise eyebrows, whether it signals any larger concerns about QBE’s prospects, remain to be seen.
In conclusion, QBE Insurance Group Limited’s positive financial results for FY22 and its continued growth aspirations in areas such as cyber insurance suggest a bright future for the company.
