Vodacom CEO Shameel Joosub is clearly confident about the mobile group’s prospects. Joosub on Thursday snapped up almost R4m in Vodacom shares, according to a notice posted by the JSE on Friday morning.
Joosub acquired 26 608 shares worth R3 981 678,60, the notice said. The shares were bought at an average price of R139,18/share.
The move comes as Vodacom outperforms its direct rival, MTN, whose share price has tanked in recent weeks.
Whereas Vodacom has fallen by just 2% in the past 30 days, despite market volatility, MTN has declined by 15% in the same period. Over the past year, MTN has dropped by 24%, while Vodacom has added 7%.
Over five years, Vodacom has also outperformed its rival, achieving a share price growth of 130% versus MTN’s 52%. Of course, this doesn’t take account of dividends paid to shareholders.
MTN’s dividend yield (the ratio of the dividend to the share price) is a very attractive 6,9%. Vodacom’s yield is also good, however, at 5,6%.
Although MTN still has by far the larger market capitalisation — R345bn versus Vodacom’s R207bn — shareholders are clearly expecting a better future performance from Vodacom. This is reflected in MTN’s trailing price:earnings multiple of 12,8 and forward p:e of 13,4. Vodacom’s trailing p:e is 16,2 and forward p:e is 14,9.
With investors fretting about the impact of sinking oil prices on the Nigerian economy and on the value of the West African nation’s currency, the naira, MTN’s share price could remain under pressure, analysts say. Nigeria is MTN’s biggest source of earnings. — (c) 2015 NewsCentral Media