Question

Calculate the followings for two companies in the same industry of one of the three industry segments of Consumer staples, materials and energy listed on the Australian Securities Exchange (ASX Top 200). You required to analyse 2018/2019 FY annual reports.

Valuation ratios

1.Price to earnings ratio (PE )

2.Price/earnings to growth ratio

4.Dividend yield

Calculate the followings for two companies in the same industry of one of the three industry segments of Consumer staples, materials and energy listed on the Australian Securities Exchange (ASX Top 200). Each group is required to analyse 2018/2019 FY annual reports.

Valuation ratios

1.Price to earnings ratio (PE )

2.Price/earnings to growth ratio

4.Dividend yield

APA Company
		FY2019	FY2018
Financial Performance (Statutory)	$m
Revenue	$m	2452.2	2386.7
Revenue excluding pass-through (1)	$m	2031	1941.4
EBITDA	$m	1573.8	1518.5
Depreciation and amortisation expense	$m	611.4	578.9
EBIT	$m	962.4	939.6
Interest expense	$m	497.4	509.7
Tax (expense) / benefit	$m	177	165.1
Profit after tax including significant items	$m	288	264.8
Significant items – after income tax	$m
Profit after tax excluding significant items	$m	288	264.8
Financial Position
Total assets	$m	15433.9	15227.2
Total drawn debt (2)	$m	9352.1	8810.4
Total equity	$m	3599.4	4126.8
Operating Cash Flow
Operating cash flow (3)	$m	1012.1	1031.6
Key Financial Ratios
Earnings per security (4)	cents	24.4	23.3
Operating cash flow per security (4)	cents	85.8	90.7
Distribution per security	cents	47	45
Funds from Operations to Net Debt	%	10.8	10.7
Funds from Operations to Interest	items	3	3
Weighted average number of securities (4)	m	1179.9	1136.9
EBITDA by Segment (Excluding Significant Items)
EBITDA (Continuing businesses)
Energy Infrastructure
East Coast
Queensland	$m	1010.1	962.2
New South Wales	$m	149.4	147.1
Victoria	$m	114	124.6
South Australia	$m	2.1	2.6
Northern Territory	$m	19.2	22.9
Western Australia	$m	277.8	237.6
Asset Management	$m	53	66.2
Energy Investments	$m	28.4	23.1
Corporate costs	$m	80.1	67.9
Divested businesses (7)	$m

	AGL Company
Profit		FY2019	FY2018
Revenue	$m	13,246	12,816
Underlying EBITDA	$m	2,285	2,236
Underlying EBIT	$m	1,660	1,668
Statutory Profit/(Loss) after tax	$m	905	1,582
Underlying Profit after tax	$m	1,040	1,018
Financial position and cash flow
Capital expenditure	$m	939	778
Total assets	$m	14,821	14,633
Net debt	$m	2,600	2,491
Gearing (net debt/net debt + equity)	%	23.5	22.9
Operating cash flow before interest,
tax and significant items	$m	2,013	2,474
Credit rating2		Baa2	Baa2
Shareholder value
Statutory earnings per share	cents	138	241.2
Underlying earnings per share	cents	158.6	155.2
Dividends declared	cents	119	117
Return on equity	%	12.5	13.1
Customer account numbers
Electricity accounts	000	2,277	2,235
Gas accounts	000	1,431	1,406
Total customer accounts	000	3,708	3,641
Dual fuel accounts	000	2,070	2,027

Answer 1

1. Find out the Price to Earnings ratio.

APA company

Particulars	FY 2019	FY 2018
Market value per share (as of 30th June)*	$ 11.19	$ 10.87
Earnings per share	$ 0.24	$ 0.23
Price to Earnings ratio (P/E)	46.625	47.26

AGL Company

Particulars	FY 2019	FY 2018
Market value per share (as of 30th June)*	$ 21.09	$ 22.48
Earnings per share	$ 1.38	$ 2.41
Price to Earnings ratio (P/E)	15.28	9.32

* Market value has been taken from the Australian Stock exchange (asx.com.au)

2. Find out Price-Earnings to Growth ratio (PEG).

APA company

Particulars	FY 2019	FY 2018
Price to Earnings ratio (P/E)	46.625	47.26
Earnings per share (Growth)**	(0.24/0.23)-1 = 4.35%	(0.23/0.21)-1 = 9.52%
PEG	10.72	4.96

AGL Company

Particulars	FY 2019	FY 2018
Price to Earnings ratio (P/E)	15.28	9.32
Earnings per share (Growth)**	(1.38/2.41)-1 = -42.73%	(2.41/0.805)-1 = 199.37
PEG	-0.35	0.05

** Growth in EPS = (EPS of Current year/EPS of Previous year)-1

3. What is the Dividend Yield.

APA company

Particulars	FY 2019	FY 2018
Dividend per share	$ 0.47	$ 0.45
Market value per share (as of 30th June)*	$ 11.19	$ 10.87
Dividend yield	4.20%	4.14%

AGL Company

Particulars	FY 2019	FY 2018
Dividend per share	$ 1.19	$ 1.17
Market value per share (as of 30th June)*	$ 21.09	$ 22.48
5.Dividend yield	5.64%	5.20%