Australian Securities Assignment 2022

FIN20014 Assignment 1 Set A
Part A
Australian Securities Exchange (ASX)known as
Australia’s primary securities exchange. It is a
market operator, clearing house and payments
system facilitator. Computershare Limited (CPU)
known as an Australian stock transfer company that
provide various of services.
ASX was formed in 1 April 1987after the Australian Parliament enabled the
amalgamation of six independent state-based stock exchange by drafting the ligislation. The
Australian Stock Exchange merged with the Sydney Future Exchange and operated under the
name Australian Securities Exchange (ASX) in 2006.ASX is regulated by ASIC, under
control of Corporation Acts and its own listing rules. As a market operator, ASX provides
various of services such as securities exchange services, derivatives exchange services,
market data services, investor education courses and others.Entities can raise their capital and
have their securities publicly traded by listing on ASX. ASX also lists debts that including
bonds and exchange-traded investment products. Until now, up to 2,200 of entities around the
world are listed on ASX since the ASX formed in 1987.
In 1978, Computershare Limited (CPU) was founded in Melbourne and acquire the
business of Harris Bank in Chicago then entered U.S. market in 200, become the foremost
transfer agent and investor services provider in the world. CPU became a public traded
company on 12 April 1994. CPU provides various of services to public which is Issuer
services, Mortgage services& Property Rental Services, Business Services, Employee Share
Plans & Voucher Services, Technology Services, Communication Services and Utilities
operations.
The reason that I choose ASX and CPU as the research of my assignment is because
this 2 companies both provide services in the related field. It will help me to compare the
performance of these 2 companies in a clearer way by using the data analysis. Using the
analysis, I able to observe which company will have a better performance, better return and
able to make decision on which companies should shareholders invest by compare the
Earning per Share, Total Dividend and the Total Shareholder’s Return of these 2 companies.
ASX CPU
2020 2021 2020 2021
[ASX][CPU] 10 September 2021

EPS
Basic EPS $ 498,600,000−$ 0
193,587,739 =$ 2.57 per share
$ 480,900,000−$ 0
193,591,795 =$ 2.48 per share
$ 339,110,000−$ 0
541,420,000 =$ 0.63 per share
$ 251,660,000−$ 0
559,520,000 =$ 0.45 per s
Diluted EPS $ 498,600,000−$ 0
193,587,739 =$ 2.57 per share
$ 480,900,000−$ 0
193,591,795 =$ 2.48 per share
$ 339,220,000−$ 0
541,420,000 =$ 0.63 per share
$ 251,660,000−$ 0
559,750,000 =$ 0.45 per s
Reported EPS $2.65 per share $2.48 per share $0.70 per share $0.65 per share
Total Dividend $ 237,200,000+$ 225,300,000=$ 462,500,000$ 215,300,000+$ 217,600,000=$ 432,900,000$ 124,378,861+ $ 124,380,452=$ 248,759,313$ 138,857,747+$ 124,370,429=$
DPS $ 462,500,000−$ 0
193,587,739 =$ 2.39 per share
$ 432,900,000−$ 0
193,591,795 =$ 2.24 per share
$ 248,759,313−$ 0
541,420,000 =$ 0.46 per share
$ 263,228,176−$ 0
559,520,000 =$ 0.47 per s
TSR 13.60% 6.77% -2.66% 41.94%
Calculation for EPS= Net Income−Preferred Dividend
Average Outstanding Shares of the Company
Calculation for DPS= Net Dividend −Special Dividend
Average Outstanding Shares of the Company
Calculation forTotal Dividend=Final Dividend + Interim Dividend
For the Earning Per Share (EPS), it is a market performance indicators of a
company’s profitability to look at how current and potiental shareholders evaluate the
company performance. It is also a critical indicator that investors to observe which funds are
available for dividend payments.Dividend Per Share (DPS) is the total number of dividends
for every ordinary share issued and usually used by a company to calculate dividend yield.
Total Shareholder Return (TSR) is to calculate the annualised return to shareholder.
For ASX, to compare the performance from 2020 to 2021, we can see that the EPS is
dropped by $0.09 per share which is from $2.57 per share dropped to $2.48 per share, DPS
dropped by $0.15 per share that dropped from $2.39 per share to $2.24 per share and consists
of 13.60% in 1-year average TSR.
For CPU, the analysis shows that EPS is dropped by $0.18 per share which is $0.63
in year 2020 dropped to $0.45 in year 2021. However, for the DPS of CPU is increase by
$0.01, year 2020 of $0.46 per share increase to $0.47 per share. CPU consists of -2.66% in 1-
year average TSR.
After analysis the data of 2 companies, I observed that most performance of 2
companies had dropped. For my opinion, the reason that cause the dropped performance is
due to the Covid-19 pandemic, it is a huge crisis that faced by most companies. From the
table we can see that the net profit of both companies, share price of both companies, and the
divident paid of ASX dropped. Since the pandemic already happened, the management of
[ASX][CPU] 10 September 2021

both companies should find a way to minimize the lost of company to maintain the
performance of the company as the drop of EPS will affect the health of company and will
lower the shareholder retun. However, company can reduce unnecessary expenses or share
issued to increase the EPS.
For ASX and CPU have their own good performance in the year. Compare between
the 2 companies, the EPS of of ASX is higher $2.03 per share than CPU in the year of 2021.
The DPS of ASX is also higher than CPU by $1.77 per share. From the statement above, we
can observe that the net profit for the year 2020 to 2021 of two companies dropped but two
companies offered more shares, so can believe that this is one of the reason the EPS of 2
companies dropped. For that dividend, ASX dividend paid out is higher than CPU by $1.77
per share. For my opinion, I feel shareholders and investor will more willing to invest at ASX
instead of CPU as the average performance of ASX is higher than CPU. To observe the
company performance health, I also calculate the dividend payout ratio for both companies to
determine whether the company is try to stable the ratio as if the ratio is too high, the
percentage of the company’s profits are being reinvested for future operation will be very
small then affect the company’s ability to maintain high divident payments in the future. The
divident payout ratio can be calculated by Annual Dividends per Share
Earnings per Share , we can observe that
the payout ratio for CPU is no stable which their ratio increase from 73% to 104% but ASX
maintain their ratio between 90%-100%. Although we can see that 104% divend is high, but
it is not good for a company for long term as company may not enough pofit to cover the
dividend in the future. The TSR in 1-year average of ASX is higher than CPU 16.26%, but
for TSR in 3-year average CPU is higher than ASX by 35.17%..
Part B
[ASX][CPU] 10 September 2021
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Year