CDA - Codan

 CDA Codan

22 july 2026

https://stockanalysis.com/quote/asx/cda/

https://www.tradingview.com/symbols/ASX-CDA/financials-overview/

https://www.marketindex.com.au/asx/cda

https://koalagains.com/stocks/ASX/cda

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ASX:CDA (Codan Limited) has experienced strong operational growth over the last 5 years, achieving record-breaking earnings and a share price rally. Net profit reached $103.5 million in FY25 and hit $71.2 million in H1 FY26 alone, while maintaining low debt and a strong Return on Equity (ROE) exceeding 24%. [1, 2, 3, 4, 5, 6]

5-Year Financial & Operational Breakdown

• Profitability: Codan has sustained impressive margins, with Net Profit After Tax (NPAT) rising consistently. The company achieved an NPAT of $103.5 million in FY25 (a 27% year-on-year increase) and upgraded its full-year guidance for FY26 on the back of bullish sales in its Communications and Metal Detection units. [1, 2, 3]

• Debt Levels: The balance sheet remains highly conservative. By the end of FY25, net debt had been significantly reduced to $78.3 million, and its net debt-to-EBITDA ratio sat comfortably at 0.4 times, providing ample room for strategic acquisitions. [1, 2, 3, 4]

https://stockanalysis.com/quote/asx/cda/financials/ratios/

These are its D/E ratios for the last 5 years:

2026 - 0.27

2025 - 0.31

2024 - 0,32

2023 - 0.31

2022 - 0.22

• Return on Equity (ROE): Codan has been a highly capital-efficient business. The company maintains an ROE of 24.35%, comfortably beating historical levels as revenue scaling drives bottom-line growth. [1, 2, 3]

• Share Price Performance: The stock has rallied significantly, climbing from under $10 over the earlier part of the 5-year cycle to reach record all-time highs exceeding $45 by mid-2026. [1, 2, 3]

Key Catalysts

• Minelab (Metal Detection): Sustained demand driven by favorable global gold prices and successful new product releases.
• Communications: Tactical acquisitions (such as Kagwerks and Adaptive Dynamics) have expanded the company’s footprint in defense and technology, leading to an increasing and secure order book. [1, 2, 3, 4, 5]

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PE ratios

This share is priced to perfection at the moment. (aug 2026)

Are PE ratios at this level justified? everything needs to go right for these valuations to be sustainable. Will it revert to the mean PE of 20 one day?? 

The historical Price-to-Earnings (P/E) ratio for Codan Limited (ASX: CDA) has fluctuated significantly over the last 10 years, moving from single digits up to its current premium multiple of 62.4x to 62.9x in July 2026. The stock's 10-year historical average P/E sits at roughly 20.10. [1, 2, 3, 4]

Analyze the 10-Year Historical P/E Ratios

The table below breaks down the annual P/E ratios for Codan Limited from 2016 through mid-2026 based on year-end financial reporting. [1, 2]

Year [1, 2, 3, 4]	Approximate P/E Ratio	Key Driver / Market Phase
2026 (Current)	62.4x - 62.9x	Massive premium pricing driven by a 55% surge in net income
2025	35.3x - 37.1x	Rising demand for communications tech and metal detection gear
2024	26.8x - 27.0x	Recovery in core tech divisions and improved profit margins
2023	21.3x - 21.5x	Stabilizing period after post-COVID supply chain and demand shocks
2022	11.8x - 12.5x	Sharp multiple contraction following broader tech selloff
2021	36.0x	Peak pandemic demand for Minelab detectors and gold-mining tools
2020	22.0x	Steady growth as digital communications segments expanded
2019	17.5x	Moderate valuation matching consistent mid-teen earnings growth
2018	15.1x	Tracking close to long-term historical median levels
2017	18.4x	Early phases of international tactical communications scaling
2016	9.0x	Cyclical low with ultra-cheap multiples relative to earnings

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Evaluate Essential Valuation Metrics

To get a full look at the company's valuation cycle, look closely at these long-term parameters: [1, 2]

• 10-Year Average: 20.10
• 10-Year Median: 16.86
• 10-Year Minimum: 9.52 (during the 2016 cycle)
• 10-Year Maximum: 62.92 (reached in current 2026 trading)
• Forward P/E Multiple: 43.5x - 43.9x (pricing in projected earnings growth) [1, 2, 3, 4]

Review Crucial Growth Drivers

• Multiple Expansion: The dramatic jump from ~27x in 2024 to over 62x in 2026 is due to the stock price running ahead of near-term earnings. Investors are paying a premium because first-half 2026 net income jumped 55% to AU$71.2m. [, 2, 3]
• Sector Contrast: At ~62x earnings, Codan trades significantly higher than the median ASX market average (where roughly half of listed companies sit below a 22x P/E). However, it remains closely aligned with its direct peer average in high-growth electronics. [1, 2, 3]

You can cross-reference changing consensus valuations through the Morningstar ASX CDA Profile

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dividends ?

Not an income stock ! ? Though the dividends are growing, they are very small. 

This is a growth stock. 

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ROIC Vs WACC

Codan Limited (ASX:CDA) consistently maintains a Return on Invested Capital (ROIC) that significantly exceeds its Weighted Average Cost of Capital (WACC), indicating strong long-term economic value creation. Current metrics show an ROIC of approximately 16% to 20% compared to a WACC of roughly 8.6% to 11.8%. [1, 2, 3, 4]

Capital Efficiency and Value Creation

ROIC Trend: Codan's 3-year average ROIC sits around 16%, with trailing figures reaching up to 20.02%, showing high efficiency in deploying capital into core operations like communications and metal detection. [1, 2, 3]
WACC Trend: The company’s blended cost of capital generally tracks between 8.6% and 11.8% depending on prevailing risk-free rates, equity beta, and debt-to-equity weighting. [1, 2]
Spread: Because ROIC consistently surpasses WACC by a wide margin (a positive spread of ~8% to 11%), Codan demonstrates a durable economic moat, generating excess returns well above the minimum required by its providers of capital. [1, 2, 3, 4]

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