In game 3 of the semi-finals of the Motley Fool's ASX World Cup, we have Australia's largest independent oil and gas producer Woodside Petroleum Limited (ASX: WPL) up against global share registry Computershare Ltd (ASX: CPU).
Woodside has already accounted for some strong opponents including Oil Search Limited (ASX: OSH) and Santos Limited (ASX: STO). Computershare has performed likewise, upsetting CSL Limited (ASX: CSL) and Brambles Limited (ASX: BXB).
So, let's take a look at how the two teams line up…
| Measure | Woodside | Computershare |
| Market Capital | $34.1 billion | $6.9 billion |
| P/E ratio | 14.8x | 19.3x |
| Dividend Yield | 5.6% (fully franked) | 2.4% (partly franked) |
| Shareholder return – 10 years | 12.3% | 18.4% |
| Forecast earnings growth – 2 years | 11.6% | 11.1% |
Source: Commsec, CapitalIQ
Based simply on P/E ratios, Woodside looks to have the upper hand, and given the company's generous fully franked dividend of 5.6%, scores and takes a 1-0 lead over Computershare. But with falling LNG prices, that represents a threat to Woodside's existing LNG operations and a major threat to its proposed Browse and Sunrise LNG projects. An own goal levels the scores 1-1.
Computershare is heavily exposed to the recovering US economy and the potential for US interest rates to rise, which should be great news for Computershare and its fans/shareholders. The company holds a substantial float (around $14 billion) which it earns interest on, and increasing capital markets activity (mergers and acquisitions) means more demand for the company's services. Computershare scores, and takes the lead 2-1.
Woodside is struggling against the class of Computershare, and while the current dividends are attractive, the company is likely to raise capital in future to fund its planned LNG projects. Woodside goes a man down thanks to injury, giving Computershare a heavy advantage.
The share registry goes further ahead 3-1, scoring a goal on the back of analysts underestimating the company's future potential.
Computershare wins 3 to 1!
