Valuing A2M and WOW Shares Made Simple

Morgan Winslow

Published: February 24, 2026 8:34 PM ET

The A2 Milk Company Ltd (ASX:A2M) and Woolworths Group Ltd (ASX:WOW) have both drawn investor attention recently. Their share prices reflect key developments in the market. Let’s explore the valuation of A2M and WOW shares, as well as the unique business models that drive their success.

Current Share Price Movements

Since the beginning of 2025, the A2M share price has appreciated by 2.8%. Meanwhile, WOW shares are approximately 22.7% higher than their 52-week low. These movements indicate a dynamic market environment that affects investor sentiment.

A2 Milk Company Overview

Founded in 2000 in New Zealand, A2M focuses on dairy products that contain the A2 protein type. This sets it apart from the majority of dairy products, which contain the A1 protein. The A1 protein is often associated with digestive discomfort for some consumers.

Production and Distribution

A2M relies primarily on distribution and marketing.
Production is outsourced to over 25 certified dairy farms in Australia.
Infant formula is produced by supply partner Synlait Milk in New Zealand.

Studies suggest that A2 milk may be easier to digest than standard dairy. However, the science remains inconclusive. Regardless, many consumers report positive outcomes when switching to A2 milk.

Woolworths Group Overview

Established in 1924, Woolworths is the leading grocery retailer in Australia and New Zealand. The company operates over 3,000 stores and employs more than 100,000 people. It ranks among Australia’s largest corporations across various sectors.

Revenue Streams

Woolworths holds over 35% market share in Australian groceries.
The company also runs Big W discount department stores.
B2B operations include foodservice distributor PFD.

Woolworths is favored by ASX investors for its dividend income, with a historical yield often exceeding 3%. Its revenue primarily stems from consumer staples, suggesting relative stability during economic downturns.

Valuation Insights for A2M and WOW

Valuing A2M shares can be approached through its price-to-sales (P/S) ratio. Currently, A2M has a P/S ratio of 5.44, higher than its five-year average of 3.44. This suggests that either the share price has risen, sales have decreased, or both.

Despite revenue growth over the past three years for A2M, investors should consider multiple valuation metrics before making decisions.

Woolworths Valuation Metrics

For WOW shares, a useful valuation measure is the dividend yield. Presently, Woolworths offers a trailing dividend yield of approximately 4.60%, which is previously much higher than its five-year average of 2.92%. This stability makes WOW a reliable choice for income-focused investors.

Investment Considerations

Investing in A2M and WOW shares provides different opportunities and risks. While A2M represents growth potential in the health-conscious dairy segment, WOW offers stability through its established market presence.

Utilizing comprehensive approaches like Discounted Cash Flow (DCF) and Dividend Discount Models (DDM) can enhance understanding of these companies’ values. Resources are available online, including free valuation spreadsheets to assist in learning these techniques.