Over the past three years, Safaricom shares have experienced a notable decline of more than a third in their value. Despite this downturn, Safaricom remains a steadfast and significant player in the telecommunications industry, boasting a robust foundation that continues to attract investors.
As East Africa’s leading telecommunications company, Safaricom holds a prominent position in Kenya’s market and has expanded its influence across the region.
In this guide, I will show you how to buy Safaricom shares in Kenya and start enjoying proceeds from its growth and market dominance.
About Safaricom
Founded in 1993 and partly owned by the Kenyan government, Safaricom has grown to become a pivotal provider of mobile communication, financial services, and digital solutions. With a customer base exceeding 40 million subscribers, the company has solidified its reputation for innovation, reliability, and consistent growth within the sector.
Despite recent market fluctuations, Safaricom maintains an advantageous position due to its diverse service offerings, strong market presence, and strategic partnerships.
How to Buy Safaricom Shares in Kenya
Here’s a comprehensive guide on how to buy Safaricom shares:
- Set Investment Goals and Budget
Define your investment objectives, whether they’re short-term gains or long-term wealth accumulation. Determine the amount of money you’re willing to invest in Safaricom shares, considering your financial situation and risk tolerance.
- Research Safaricom and Understand the Market
Conduct thorough research on Safaricom, analyzing its financial performance, market position, growth prospects, and competitive landscape. Stay updated on news, quarterly reports, and industry trends to make informed investment decisions.
- Choose a Brokerage Firm
Select a reputable brokerage platform that offers access to the Nairobi Securities Exchange (NSE), where Safaricom is listed. Compare brokerage firms based on factors such as trading fees, commissions, user interface, research tools, and customer support.
- Open a Brokerage Account
Sign up and open a brokerage account with the chosen platform. Complete the required documentation, provide identification, and undergo the verification process. Ensure the account is funded with the amount you intend to invest in Safaricom shares.
- Place an Order
Log in to your brokerage account and navigate to the trading section. Choose Safaricom (Safcom) from the list of available stocks. Decide on the type of order you want to place – market order (buy at the current market price) or limit order (buy at a specific price). Enter the quantity of Safaricom shares you wish to purchase and confirm the order.
- Monitor Your Investment
After executing the trade, keep track of your Safaricom shares regularly. Monitor the stock’s performance, stay informed about company updates and market changes, and reassess your investment strategy if necessary.
- Consider Dividends and Reinvestment
Safaricom often pays dividends to its shareholders. Understand the company’s dividend policy and consider whether you want to receive dividends as income or reinvest them to purchase more Safaricom shares.
If you’re new to investing or uncertain about your investment choices, consider consulting a financial advisor or investment professional. They can provide guidance tailored to your financial goals and risk tolerance.
About Safaricom Shares – Key Statistics
- Industry: Wireless Telecommunications Services
- Sector: Telecommunication Services
- Current price: Ksh13.60
- Market Cap: Ksh538.82B
- P/E Ratio: 8.56
- Dividend: Ksh0.62
- Fiscal Year-End: 03/2024
- Revenue: Ksh309.7B
- Net Income: Ksh62.27B
- 2023 Sales Growth: 4.05%
Safaricom Limited, listed on the Nairobi Securities Exchange, is currently trading at Ksh13.60 per share, reflecting a market capitalization of approximately Ksh538.82 billion. The company operates within the Wireless Telecommunications Services industry as part of the Telecommunication Services sector.
As of its fiscal year-end in March 2024, Safaricom recorded substantial revenue amounting to Ksh309.7 billion, showcasing its strong financial performance. The net income for the same period stood at Ksh62.27 billion, underlining the company’s ability to generate profits within a competitive market.
Safaricom’s Price/Earnings (P/E) ratio stands at 8.56, suggesting a relatively moderate valuation in comparison to its earnings. Additionally, the company issued a dividend of Ksh0.62 per share, demonstrating its commitment to providing returns to its shareholders.
Despite market fluctuations, Safaricom exhibited a sales growth of 4.05% in 2023, signifying its resilience and capacity for continued expansion within the telecommunications industry.
Overall, Safaricom’s robust financial performance, steady revenue growth, significant market share, and consistent dividends position it as an attractive investment opportunity within the telecommunications sector. Investors keen on a stable and established company within the Kenyan market may find Safaricom shares appealing given its strong fundamentals and growth potential.
Safaricom Shares Price History in 2023
Throughout 2023, Safaricom’s stock price charted a tumultuous journey, reflecting the company’s volatility within the market. The year commenced with the share price opening at its highest point of KSh 23.9 in January, quickly plunging to a low of KSh 21.10, indicating immediate uncertainty and fluctuations in investor sentiment. This early turbulence set the tone for a year marked by erratic movements in the stock’s value.
By February, the share price momentarily surged to KSh 24.45, hinting at a potential positive turn, only to endure a significant setback in mid-March, dropping to KSh 16.5. A partial recovery ensued later in March, elevating the price to KSh 19.00, suggesting a temporary stabilization or renewed investor interest.
However, this respite was short-lived as the share price steadily declined, reaching KSh 13.00 by mid-May, indicating persistent downward pressure on the stock. An intermittent uptick occurred in early June, pushing the share price to KSh 17.00, showcasing short-term volatility before declining again to KSh 14.9 by mid-June.
Despite brief spikes, notably reaching close to KSh 20 in mid-July, the share price adopted a downward trajectory, plummeting sharply to KSh 11.7 in early November. This significant drop may have been influenced by broader market conditions or company-specific news impacting investor sentiment.
As of the current period, Safaricom’s shares have stabilized somewhat, trading at KSh 13.6. Overall, the stock’s journey in 2023 showcased extreme fluctuations and shifting investor confidence, depicting a turbulent and dynamic market environment that impacted Safaricom’s share value throughout the year.
Reasons to Invest in Safaricom Shares
Investing in Safaricom shares can be a strategic choice for several reasons, considering the company’s strong market position, financial performance, and growth prospects:
- Dominance in the Telecommunications Market: Safaricom is the leading telecommunications company in East Africa, particularly in Kenya, with a massive market share. Its strong brand presence and extensive network infrastructure give it a competitive edge in the industry.
- Diversified Revenue Streams: Beyond traditional telecom services, Safaricom has diversified its offerings, including mobile money (M-Pesa), data, enterprise solutions, and value-added services. This diversification provides stability and multiple income sources for the company.
- Solid Financial Performance: Safaricom has demonstrated consistent revenue growth and profitability over the years. With impressive fiscal year-end revenue of Ksh309.7 billion and a net income of Ksh62.27 billion in 2024, the company exhibits financial stability and robust earnings.
- Innovation and Adaptability: Safaricom is known for its innovation, constantly evolving its services and products to meet changing consumer needs. Its adaptation to new technologies and trends in the digital space has contributed to its resilience and continued relevance.
- Strategic Partnerships and Investments: Safaricom has formed strategic partnerships and collaborations both locally and internationally. Collaborations with global tech companies and investments in emerging technologies position Safaricom for potential growth opportunities.
- Dividend Payments: The company has a history of paying dividends to its shareholders. For investors seeking regular income, Safaricom’s consistent dividend payments make it an attractive option.
- Potential for Future Growth: Safaricom continues to explore new avenues for growth, including expanding its digital services, entering new markets, and investing in emerging technologies. These initiatives could drive future revenue and market expansion.
- Resilience in Economic Downturns: Telecommunications is considered a relatively resilient sector, as communication services remain essential even during economic downturns. Safaricom’s stability in adverse market conditions can make it a defensive stock in a diversified portfolio.
- Government Support and Regulation: As a partially state-owned company, Safaricom enjoys government support, creating a level of stability and support from regulatory bodies that can positively impact its operations and expansion plans.
Considering these factors, investing in Safaricom shares could be an attractive opportunity if you are seeking exposure to a reputable telecommunications company with a history of strong performance, innovation, and potential for future growth. However, you should conduct your due diligence and consider your investment goals and risk tolerance before making any investment decisions.
How to Buy Safaricom Shares – FAQs
As of the current trading period, Safaricom shares are priced at approximately Ksh13.60
Earnings from Safaricom shares in Kenya depend on various factors, including the number of shares owned, dividend payouts, and changes in the share price. It’s variable and not a fixed amount.
The minimum number of shares an investor can buy in Safaricom is typically 500 shares. This minimum purchase requirement is often set by brokerage firms or trading platforms, allowing investors to buy shares in multiples of 500.
