Fact based stock research
Safaricom (NASE:SCOM)

KE1000001402

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Safaricom stock research in summary

safaricom.co.ke

ANALYSIS: With an Obermatt Combined Rank of 74 (better than 74% compared with investment alternatives), Safaricom (Wireless Telecommunication, Kenya) shares have above-average financial characteristics compared with similar stocks. Shares of Safaricom are a good value (attractively priced) with a consolidated Value Rank of 78 (better than 78% of alternatives), are safely financed (Safety Rank of 55, which means low debt burdens), but show below-average growth (Growth Rank of 41). ...read more

RECOMMENDATION: A Combined Rank of 74, is a buy recommendation based on Safaricom's financial characteristics. As the company Safaricom's key financial metrics exhibit good value (Obermatt Value Rank of 78) but low growth (Obermatt Growth Rank of 41) while being safely financed (Obermatt Safety Rank of 55), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 78% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	78
Growth Rank	41
Safety Rank	55
Combined Rank	74

Country	Kenya
Industry	Wireless Telecommunication
Index	Good Governace Growth Markets
Size class	Large

This stock has achievements: Top 10 Stock.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Safaricom

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	18	47	88	78
GROWTH
GROWTH	83	31	67	41
SAFETY
SAFETY	91	83	63	55
SENTIMENT
SENTIMENT	n/a	69	86	^new
360° VIEW
360° VIEW	n/a	75	94	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 31-Mar-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Safaricom is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	18	47	88	78
GROWTH
GROWTH	83	31	67	41
SAFETY
SAFETY	91	83	63	55
COMBINED
COMBINED	52	59	94	74

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Safaricom the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 78 (better than 78% compared with alternatives) for 2024, Safaricom shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Safaricom. Price-to-Sales (P/S) is 54, which means that the stock price compared with what market professionals expect for future sales is lower than for 54% of comparable companies, indicating a good value concerning Safaricom's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 93% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 96 (dividends are expected to be higher than 96% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 57% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Safaricom to 43. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 78, is a buy recommendation based on Safaricom's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner in assets than its competitors. For instance, the company could be leasing its production facilities or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the three good value ranks for Sales, Profits, and Dividends are reliable indicators for the stock price value. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	4	19	60	54
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	44	51	95	93
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	4	14	36	43
DIVIDEND YIELD
DIVIDEND YIELD	67	86	98	96
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	18	47	88	78

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Safaricom; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 41 (better than 41% compared with alternatives), Safaricom shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Safaricom. Sales Growth has a rank of 68 which means that currently professionals expect the company to grow more than 68% of its competitors. Stock Returns are also above average with a rank of 61. But Capital Growth has only a rank of 27, which means that currently professionals expect the company to grow its invested capital less than 73% of its competitors. Profit Growth is also low, with a rank of only 30, which means that, currently, professionals expect the company to grow its profits below average. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 41, is a hold recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 61% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	64	86	71	68
PROFIT GROWTH
PROFIT GROWTH	n/a	13	45	30
CAPITAL GROWTH
CAPITAL GROWTH	n/a	26	93	27
STOCK RETURNS
STOCK RETURNS	83	51	11	61
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	83	31	67	41

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Safaricom.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 55 (better than 55% compared with alternatives), the company Safaricom has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Safaricom is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Safaricom. Leverage is at a rank of 70, meaning the company has a below-average debt-to-equity ratio. It has less debt than 70% of its competitors. Liquidity is also good at a rank of 66, meaning the company generates more profit to service its debt than 66% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 19, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 81% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 55 (better than 55% compared with alternatives), Safaricom has a financing structure that is safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Safaricom. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with Safaricom and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	72	86	72	70
REFINANCING
REFINANCING	45	37	23	19
LIQUIDITY
LIQUIDITY	83	94	78	66
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	91	83	63	55

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Safaricom and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	11	93	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	87	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	97	65	^new
MARKET PULSE
MARKET PULSE	n/a	75	23	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	69	86	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Safaricom.
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