The Australian Securities Exchange (ASX) is the main stock market in Australia and one of the largest in the Asia-Pacific region. It is also one of the most unusual in the developed world: a handful of banks and miners make up most of the value, while the rest of the market is a long tail of small resource and biotech companies.
ScreenerHero covers 2,228 ASX stocks. This guide explains how the market is organised, where the real opportunities and traps are, and how to build a first screen.
How big is the ASX, really?
Size depends on how you count.
- About 200 stocks are worth more than 1 billion euros. These are the companies that appear in the S&P/ASX 200, the benchmark most investors mean when they say "the Australian market".
- About 595 stocks are worth more than 100 million euros. This is the practical universe for most investors, because below it liquidity thins out fast.
- About 1,060 stocks, close to half the exchange, are worth less than 50 million euros. Most are exploration miners, early-stage biotech and small tech.
That long tail is what makes the ASX different from Frankfurt or Paris. A screener that only shows the big names hides most of the exchange. One that shows everything without any quality filter buries you in companies with no revenue.
Where the value sits
Four groups account for a large share of Australian market value.
Banks. The big four are Commonwealth Bank, Westpac, NAB and ANZ. They sit in an oligopoly with high returns on equity and consistent dividends. Compare them with price to book, not the P/E, since earnings in banking are shaped by provisions.
Miners. BHP, Rio Tinto, Fortescue and South32 are the largest. Iron ore, copper, lithium, gold and coal are all represented. Mining earnings follow commodity prices, so a low P/E at the top of a cycle is a warning, not a bargain.
Healthcare. CSL is the best-known name, and the exchange lists about 200 healthcare stocks in total, most of them small biotech and medical device companies.
Property. Australian REITs (A-REITs) such as Goodman Group trade on the ASX, and the exchange has roughly 70 real estate stocks. For REIT screening in general, the approach in our US REIT guide carries over.
By count, the picture is different: close to 900 of the 2,228 stocks are in basic materials, which makes mining the single biggest sector of the exchange by number of companies.
What makes the ASX different to screen
Dividend imputation
Australia gives shareholders a tax credit for the corporate tax a company has already paid. A fully franked dividend carries the full credit. For a resident investor, a 4% fully franked yield is worth more than a 4% unfranked one. For an investor outside Australia the credit is usually of no use, so compare yields without it. Our guide to dividend screening explains the general method.
Half-yearly reporting
Most Australian companies report twice a year, not every quarter, and many have a 30 June financial year end. Reporting seasons concentrate in August and February. Expect fewer data points and larger jumps when results land.
Cash-flow reports for companies that burn cash
Companies with no revenue, such as explorers and early biotech, must still file regular cash flow reports. Read them. The number that matters is the cash runway: how many months of spending the current cash balance covers. A company with six months of cash will almost certainly raise capital, which usually dilutes existing holders.
Companies from outside Australia
Some ASX companies are domiciled elsewhere, including New Zealand, and some report their accounts in another currency (BHP reports in US dollars, for example). Prices on the ASX are in Australian dollars. Check which currency a financial figure is in before you compare two companies.
A practical way to screen ASX stocks
Step 1: set a size floor. Start at 100 million euros of market cap. This removes most of the shells and leaves roughly 595 stocks. Lower it later if you want to dig into microcaps on purpose.
Step 2: separate the groups. Do not compare a bank, a miner and a software company on the same ratios. Filter by sector first.
Step 3: pick the right ratio for each group.
| Group | Start with |
|---|---|
| Banks | Price to book, return on equity |
| Miners | EV/EBITDA, free cash flow yield, net debt |
| Healthcare and tech | Revenue growth, gross margin, cash |
| REITs | Price to book, dividend yield, debt |
Step 4: check quality. Return on invested capital and free cash flow yield separate real businesses from stories.
Step 5: look at insiders. In a market where small companies dominate, insider buying is one of the few signals that is hard to fake.