A choice of investment alternatives exist with companies having differing Profiles, fundamental and technical Values, business Risks and share price Momentum.

Investment preferences may be driven by a range of factors. A mix of influences may be considered. Influences may include factors such as:

• market capitalisation;
• earnings;
• dividend yield;
• financial position; and
• momentum of a company’s share price.

A comparison of alternatives can be beneficial in identifying investments that best fit your goals, risk tolerance and time horizon.

Code

A share’s code is a unique short name identifier for companies that are listed on the ASX exchange. Codes are defined using a convention. Share codes are between 3 and 6 characters long.

Fully-paid ordinary shares are generally 3 letters long. They reflect as closely as possible the issuing company’s name, e.g. the code for BHP is BHP.

Related securities are usually the base code plus another 1 to 3 characters indicating the type of security, e.g. BHP preference shares might have the code BHPPA.

Codes are used to place trade orders, obtain share price quotes and by the media to stream tickers.

Company

Company is the name of incorporation of the business entity.

The company name may be used to place trade orders, obtain share price quotes and by the media in business articles. It is useful particularly for referring to companies that you are not familiar with as it is less obscure than the ASX code.

Index

The peer index identifies companies that may be considered as an alternative investment to the company searched.

A sort option is provided to list companies by there industry group which provides a more granular comparison of alternatives.

Market Capitalisation

Market capitalisation provides an indicative comparison of a company’s relative size as adjudged by the market. It is derived from the number of shares on issue and the current share price.

Market capitalisation and liquidity are determinants of a company’s participation in indices. This in turn is an influence of companies targeted for investment by fund managers and coverage by research analysts.

Close

The closing price is set from the final trade of the day for a company.

Closing price:

• provides a comparison to a company’s benchmark value;
• is a factor in considering the value of a “minimum” investment amount; and
• may be a consideration in structuring a strategy such as targeting “penny dreadful” shares.

Dollar change in price (+/-$)

The dollar change in price is the value difference between the last and prior trading day closing prices. Change in price provides an insight as to how a company has fared relative to its peers and sector. Sector performances for both index point change and percentage movement are listed in Markets Summary.

Percentage change in price (+/- %)

The percentage change in price is the performance difference between the last and prior trading day closing prices. Change in price provides an insight as to how a company has fared relative to its peers and sector. Sector performances for both index point change and percentage movement are listed in Markets Summary.

P/E Current

The current P/E for the company is calculated on the basis of the closing share price. It is measured by dividing the last closing share price by earnings per share (EPS). EPS is based on the last actual earnings results reported by the company and the projected EPS figure for the next year based on analyst consensus forecasts.

Current company P/E ratio can provide a useful benchmark for comparing the historical average annual P/E ratios. Companies which are selling for much more than their historical P/E could be overvalued. It is important to bear in mind, however, that other factors can influence the level of P/E ratios. For example, in low interest rate environments higher P/E ratios can be sustained.

P/E Benchmarks

The P/E benchmarks are based on the average annual P/E. It is measured by dividing the average monthly closing share price for that year by earnings per share results reported by the company.

Average annual P/E ratios can provide a useful benchmark for comparing the company’s current P/E ratio and to consider relativities to peers.

A choice of historical P/E comparisons may be made which enables your judgment to be applied in determining the most appropriate comparisons. For example, the choice enables years with anomalies such as out of character lows and highs to be filtered out of the comparison.

Dividend Yield

The dividend yield is based on the total dividend for the year, divided by the number of shares ranked for dividends. The total dividend for the year is based on the actual dividends reported by the company in the last annual financial accounts and the analyst consensus projected dividends for the next 12 months. The dividend yield excludes special dividends.

Dividends are expressed per ranked share on a:

• cash basis which is simply the cash yield divided by the Last Closing Price; and
• gross basis which is based on cash grossed up for the tax benefit of franked imputation credits.

Financial Benchmarks

The risk benchmark provides indicators:

• of the financial strength or otherwise of the company; and
• comparisons of the company’s relative risk standing to competitors.

The benchmarks are based on the financial results reported by the company.

Momentum Benchmarks

The momentum benchmarks provide indicators of the:

• technical strength or weakness of a company’s share price. Technical analysis is often associated with chartists. The analysis applies mathematical models to trading activity such as share price and volume as an indicator of price direction and strength; and
• fundamental momentum of the company based on earnings expectations.

The benchmarks provide indicators of share price momentum of the company, relative standings to competitors and index.