Cochlear $11.6 B market cap, page-11

This is the type of fundamental valuation exercise that any serious long-term investor should consider undertaking @pilko3 in order to inform their decisions to hold.

As mature businesses, Cochlear currently trades on a P/E ratio of 47.4 (MCap $11.66B, Earnings $246M) and Resmed on a ratio of 50.5 (MCap A$22.1B, Earnings A$438M). These companies have healthcare businesses comparable to ResApp, and so a P/E multiple of around 50 for the market to apply to RAP once profitable can be taken as appropriate.

This then indicates that each RAP earnings component of $10M p.a. would justify a market cap contribution of $500M. With 659M RAP shares currently on issue this translates to a 75.9 cents contribution to the share price.

So, taking future earnings of $100M as an example, a share price of $7.59 then would apply, with EPS of 15.2 cents. Applying a franked dividend payout ratio of 50%, net dividend would be 7.6c p.a., or a gross dividend of 10.9c per share allowing for franking contributions.

Your estimate of $1B p.a. earnings might require a few years to attain, but if so this would justify a share price of $75.90 should that be achieved, with a gross dividend annual of $1.09 per share.

The potential definitely is there.