Investment

20 Reasons Why You Should Buy Safaricom PLC Shares Today

BY Steve Biko Wafula · March 7, 2023 12:03 pm

KEY POINTS

Investing in the stock market can provide exposure to international markets and industries that may not be available through other investment options.

KEY TAKEAWAYS

Safaricom is the largest telecommunications company in Kenya, with a market share of around 60% in the mobile segment.

It has multiple sources of revenue, including mobile money (M-PESA), voice and data services, and enterprise solutions.

The company has consistently delivered strong financial results, with revenue and net income growth over the years.

Investing in the stock market can be a good option for investors for several reasons. First, the stock market offers the potential for high returns on investment.

Historically, the stock market has outperformed other investment options, such as bonds or savings accounts, over the long term. While there is always some risk involved, investing in stocks can provide a way to build wealth and achieve financial goals.

Second, investing in the stock market can help to diversify an investor’s portfolio. By spreading investments across different types of stocks and sectors, investors can reduce their risk exposure and potentially mitigate losses during market downturns. Additionally, investing in the stock market can provide exposure to international markets and industries that may not be available through other investment options.

Third, investing in the stock market can provide a sense of ownership and participation in the economy. When investors buy shares of stock, they become part owners of the companies in which they invest. This can provide a sense of pride and satisfaction in supporting businesses that align with their values and goals. Additionally, investing in the stock market can contribute to economic growth and job creation, as companies use the funds raised through stock sales to invest in new projects and expand their operations.

Overall, investing in the stock market can be a good option for investors looking to build wealth, diversify their portfolios, and participate in the economy. However, it is important for investors to do their research, understand the risks involved, and seek professional advice before making any investment decisions.

As an investor myself at the Nairobi Stock Exchange, I can provide some information that we take for granted about Safaricom PLC and factors that investors may consider when evaluating investment opportunities.

Safaricom PLC;

Safaricom PLC is a telecommunications company based in Kenya and listed on the Nairobi Securities Exchange and London Stock Exchange. Here are some potential reasons why investors might be interested in Safaricom shares:

Market leader: Safaricom is the largest telecommunications company in Kenya, with a market share of around 60% in the mobile segment.
Diversified revenue streams: Safaricom has multiple sources of revenue, including mobile money (M-PESA), voice and data services, and enterprise solutions.
Strong financial performance: The company has consistently delivered strong financial results, with revenue and net income growth over the years.
High profitability: Safaricom has a high profitability margin, with a return on equity (ROE) of around 40%.
Dividend payments: The company has a track record of paying dividends to its shareholders, which can provide a reliable income stream for investors.
M-PESA dominance: Safaricom’s mobile money service, M-PESA, has a dominant market share in Kenya and has been expanding into other African countries, providing potential growth opportunities.
Growing customer base: Safaricom has a large and growing customer base, with over 35 million customers as of 2021.
Solid network infrastructure: The company has invested heavily in its network infrastructure, including 5G technology, which can help support its growth and competitiveness.
Strong brand recognition: Safaricom is a well-known and respected brand in Kenya and has won numerous awards for its products and services.
Strong management team: Safaricom has an experienced and talented management team with a track record of delivering results.
Strategic partnerships: The company has formed strategic partnerships with other companies, including Vodafone and Google, to enhance its products and services.
Innovation: Safaricom has a culture of innovation, continuously developing new products and services to meet evolving customer needs.
Regulatory support: The Kenyan government has generally been supportive of Safaricom and the telecommunications industry, which can provide a stable operating environment for the company.
Favorable demographics: Kenya has a young and growing population, which can provide a large and expanding customer base for Safaricom’s products and services.
Economic growth: Kenya has been experiencing strong economic growth in recent years, which can provide a favorable macroeconomic environment for Safaricom’s business.
Competitive advantage: Safaricom has a strong competitive advantage in the Kenyan market, with a well-established brand, loyal customer base, and strong network infrastructure.
Expansion opportunities: Safaricom has been expanding into other African countries, providing potential growth opportunities beyond Kenya.
Good corporate governance: Safaricom has a reputation for good corporate governance, with transparent financial reporting and a commitment to ethical business practices.
Environmental and social responsibility: Safaricom has a strong focus on environmental and social responsibility, including initiatives to reduce its carbon footprint and support social causes.
Potential capital gains: If the company continues to perform well, Safaricom’s stock price may increase over time, providing potential capital gains for investors who purchase shares.

These factors are not exhaustive or guaranteed, and investors should conduct their own research and seek professional advice before making any investment decisions. Talk to us today for more intensive research on the listed brand. Email me; at biko@sokodirectory.com

About Steve Biko Wafula

Steve Biko is the CEO OF Soko Directory and the founder of Hidalgo Group of Companies. Steve is currently developing his career in law, finance, entrepreneurship and digital consultancy; and has been implementing consultancy assignments for client organizations comprising of trainings besides capacity building in entrepreneurial matters. He can be reached on: +254 20 510 1124 or Email: info@sokodirectory.com