You may be a potential investor but you’re not sure where to start. The stock market can seem like a complicated and inaccessible space, especially for those who don’t know much about investing. But it doesn’t have to be this way! There are many factors that go into making the perfect stock. But when you look at five of the best African stocks, these factors become much simpler.
Read on to learn more about the five best African stocks to buy now and how they might work for you!
Table of Contents
5 Best Cheap African Stocks to Buy Now
MTN Nigeria
MTN Nigeria Communications is engaged in the business of building and operating GSM cellular networks, as well as other related services. As of January 10th, 2022, its share price stood at 185.5 naira per share.
The stock rose by 16% this year alone. Previously, in November 2021, the Central Bank of Nigeria granted it preliminary approval to operate a payment service bank (PSB). According to analysts, MTN Nigeria has consistently provided returns for investors on both the dividend payment and capital appreciation fronts. Data from its official website shows that at the end of 2020, it had a revenue figure of N1.35 trillion with an average dividend payout rate of 3%.
MTN Nigeria has a strategic, consistent, and agile management team. With its recent approval for PSB from the CBN, as well as their newly proposed 5G deployment and a recently diversified ownership structure that made MTN shares publicly available to the general public on December 1, 2021, these actions explain a positive outlook for their stock position. It remains a very good buy at this moment in time for any investor seeking to get a juicy return on their investment.
Zenith Bank Plc
Zenith Bank Plc is one of Nigeria’s largest bank. The company has a strong history of consistent dividend payments, a high dividend yield, and potential for capital appreciation, making it an attractive stock for short-term and long-term investors.
According to data obtained from their website, Zenith Bank’s gross earnings increased by 5% to N696.5 billion, its non-interest revenue rose by 5% to N251.7 billion, and interest income improved by 1% to N420.8 million. This was despite difficult macroeconomic conditions in the country over the last three years. According to data obtained from their website, Zenith Bank has increased its activities in retail customer deposits, corporate deposits, loans, and heavy investment in technology. This, coupled with the economic recovery, is expected to positively affect the performance of Zenith Bank as well as its shares.
Safaricom PLC
Safaricom is the largest mobile network operator in Kenya, with over 38 million subscription-based customers. Safaricom provides you with great returns on your investment and has a payout ratio of 100%. The best thing about owning shares in this company is that you can expect huge dividends every year without having to worry about stock market crashes.
It’s probably best to invest big if possible because it will provide more long term benefits; for example bigger returns on investments and less risk involved when compared to smaller investments.
DANGOTE GROUP
The Dangote Group is a Nigerian conglomerate that operates in many different industries, from cement to sugar refining to poultry production. The company is led by Aliko Dangote, a Nigerian billionaire and one of the wealthiest people in Africa. Dangote Group employs over 10,000 people across its many subsidiaries and has seen steady growth in recent years which is a good thing for investors.
In 2015, the company announced it had reached a deal with the government of Senegal to build a $400 million factory for making sugar and other food products. In April 2016, it was announced that construction would begin on the project.
In September 2017, it was announced that Dangote’s cement company would take part in a $4 billion project to develop an oil refinery in Ghana.
In October 2017, Dangote Group partnered with Dubai-based logistics firm DP World to bid for a stake in Terminal 3 at Port Harcourt International Airport (PHIA). As well as other partnerships and collaborations that has seen this company’s stock gain ground for over the past three decades.
The Dangote Group has come a long way since its founding in 1977 and has grown to be one of Nigeria’s largest companies and a good platform for investors worldwide.
Seplat Energy PLC
Seplat Energy is a Nigerian company listed on both the Nigerian Exchange Limited and the London Stock Exchange. They are the leading independent energy company in Nigeria, with their headquarters located in Lagos, the commercial capital.
As of 2021, its stocks were traded at N650 per share, an increase from where they were in 2020, up by 61.6%. Despite a global pandemic that led to lower crude oil prices in 2020, SEPLAT was able to improve operational efficiencies as well as revenue.
They also displayed resilience through these tough periods, paying off $100 million worth of debt, making dividend payments totaling $58 million, and completing funding for their ANOH Gas Project!
SEPLAT’s stock price has been going up lately due to a couple of factors. The first is an uptick in crude oil prices, which have been on the rise and is expected to continue on that path for the next few years.
The other factor is the ANON Gas project investment, which will increase natural gas production by SEPLAT and help them rebalance their revenue exposure from crude oil.
Once operational, the ANON Gas Processing Plant, owned as a 50/50 joint venture with Nigerian National Petroleum Corporation, would be another major supplier of gas for Nigeria’s power sector as they aim to transition away from more polluting energy sources like coal plants or diesel generators.
What are the good qualities of a stock?
One of the most important factors in any stock’s volatility is its price. When stocks are risky, their returns are much higher. If you want to make big bucks, this could be the best way to go. But it’s not for everyone, and if you’re looking for a more stable investment with lower risk, this might not be the right choice for you.
Another important factor is dividend yield. This measures how much money a company pays out in dividends annually per share. The higher the dividend yield, the better, because it means your investment will grow faster and result in higher returns.
A company that pays out a 3% annual dividend is giving you an extra 3% on top of your return every year; that’s like getting free money! This is something to consider if you’re interested in long-term investments and retirement plans, as many companies pay dividends quarterly or annually.
Factors Affecting Stock Prices
There are many factors that contribute to the price of a stock. Factors like the market cap, stock performance, dividend yield, economic outlook, and more all play a role in determining what price stocks are currently trading at.
Doing your research about these factors will help you find stocks that provide excellent returns.
How do you determine which stock to target with an order to buy or sell when implementing an after-hours or pre-market trading strategy?
One of the most important factors to consider when deciding which stock to buy is its volatility. Volatility refers to the range of price fluctuations in a given period. If you are looking for a stock with high volatility, you should make sure that you have an understanding of what the company’s recent earnings are like and how they’ve been trending.
A company with low volatility will not offer as many opportunities for profit-taking because its prices will fluctuate less often. That’s just one more of the many things that go into determining which stocks are best based on your trading strategy.
Why is the cryptocurrency ticker always moving even when the stock markets are closed?
It’s not unusual to see the price of cryptocurrency change drastically in a single day. In fact, flipping from one cryptocurrency to another is enough to make you dizzy. But why is the cryptocurrency ticker always moving even when the stock markets are closed?
The reason that cryptocurrencies have such volatile prices is that they’re not regulated by a central bank or any other authority. The price of a cryptocurrency can fluctuate based on factors like global news, market sentiment, and demand. Plus, there’s no guarantee that a certain currency will exist in the future, so its price is always subject to change.
Bitcoin is an example of a cryptocurrency with extremely volatile pricing. One bitcoin can be worth anywhere from $43,000-$50,000 in just a matter of days, depending on surrounding events and speculation.
Why invest in stocks?
Stocks are an excellent way to create wealth. Investing in individual stocks has been a popular strategy for decades, and it’s still a good idea today. However, the stock market is volatile and poses certain risks.
For this reason, you should always do your research before investing any money in stocks. There are many factors that contribute to the price of a stock, and if you do your research well, you can find some African stocks that will provide excellent returns.
Why You Should Invest in Africa
There are many reasons why you should invest in Africa, but one of the most important is that it’s becoming a powerhouse for growth. The continent has the youngest population in the world, with over 60 percent of Africans under 25 years old. This means that there is a lot of potential for future earnings.
There are also income-producing assets on the continent which are growing at an alarming rate. With this kind of growth, Africa may soon become a world leader in resources.
Investing in Africa is not only smart financially, but socially as well. It’s important to support African economies so they can continue to grow and prosper. You can also help educate people across the continent that currently lack access to education or financial services by investing in an African company today.
Conclusion
In this article, we covered five of the best African stocks, and we talked about why you should invest in Africa. If you’re interested in investing in Africa, we recommend looking into these stocks and investigating ways that you can invest in Africa. You never know, your next great investment may be just a click away.