📊 Capitec registered as a bank in 2001 as the result of the acquisition of micro-lending businesses such as Smartfin and Finaid by its founding company, PSG, which also provided the bank with enough equity capital to advance its operations. Importantly, PSG stood as a shareholder of reference, allowing Capitec to ease itself into the market during the early years its growth. Capitec also differentiated itself from the outset with its diversified business model: it offered a simple, affordable and transparent product that could be easily understood by its customers, as well as micro-lending, which provided good funding at the beginning.
📊 Starting as a company that acquired a number of micro-lending businesses, Capitec went on to transform its client base into transactional banking clients. Since then Capitec has attracted over 20% of South Africa’s banking market share with more than 7.3 million customers from all income levels. As such, it has become South Africa’s fastest growing bank, with 720 branches, over 11 000 employees, and a market capital of over R152 billion.
📊 The bank has been listed on the Johannesburg Stock Exchange (JSE) since 2002, where it currently trades with a market cap of over R150 billion under the stock symbol -CPI. Capitec’s forward-thinking initiatives, such as Global One, which allows clients to manage credit transactions and services in real-time, have enabled Capitec’s fantastic growth and helped to bolster its share prices.
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- Capitec has been enjoying remarkable growth, owing largely to its affordable and simplified services, making it poised to continue attracting new clients in the current domestic economic climate. Data from its financial reports reflects the highest annual client growth in the bank’s history, raking in 1.03 million clients in 2016 alone, with an exponential growth of its headline earnings at an increase of 16% to R3.2 billion. Concurrently, Capitec’s share price increased by 16% for that year, with shareholders receiving a 26% growth in dividends.
- The bank’s other key performance indicators, including net transaction fee income, net loan fee income, and net interest income all reflected fantastic growth. As a result, demand for Capitec’s services has been flourishing, which the bank met with a capital expenditure of R704 million in 2016 in order to grow its ATM branch network and increase its property portfolio.
- Capitec’s growth strategy consists of a number of short, medium and long-term goals, including increasing its branches by 50 per year, increasing internet and mobile banking as part of its technological goal, and increasing market presence across a broad spectrum of income groups with an attractive lower credit cost.
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- Analyst forecasts indicate that Capitec shares will continue to show growth for investors who purchase them in 2019 and onwards. The live online stocks chart shows that the Capitec share price grew exponentially over the last few years, increasing from R20.70 to over R57 between 2014 and 2016.
- All in all, Capitec shares prove to have high value for those who choose to buy them, both today as well as for investors who choose to buy them in the upcoming years.
- As the bank continues its strategy of simple, affordable and transparent service delivery it works to differentiate itself in the banking market, which will allow it to attract more clients in South Africa and continue its lucrative share price trajectory.
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Before buying any stock or share one has to consider a few factors.
STEP 1: PROPER RESEARCH IS ESSENTIAL
Upon deciding you want to buy CAPITEC Stocks / Shares, it is critical for the serious investor to do proper research into the said company. Its values should align with those of the investor’s current portfolio. An investor needs to familiarise himself with the basics and history of the company, as well as its leadership and performance in the market. Its company reports should also be scrutinized.
Consultation with a brokerage firm can also assist in determining whether investing in a specific company will complement the investor’s current portfolio. The investment “risk ladder”, which identifies asset classes based on their relative riskiness, is another useful tool when determining which company’s stock / share is the best to buy.
STEP 2: CALCULATE THE AMOUNT OF INVESTMENT IN CAPITEC STOCKS / SHARES
It is important for an investor to monitor his total investment in stock in order to keep his portfolio aligned to his investment strategy. The overall value of his holdings will change with the fluctuation in stock prices, which can throw his portfolio off balance. To determine the amount to invest, multiply the number of shares of each stock by its current market price to determine the total investment in that specific stock. For example, if you own 100 shares of a $5 stock, multiply 100 by $5 to get $500.
STEP 3: DECIDE ON THE STOCK / SHARE ORDER TYPE
Investors can choose from a market order, a limit order, a stop order (also referred to as a stop-loss order) or a buy/sell stop order. It is important to familiarise yourself with each type’s pros and cons before deciding which one will suit your current stock profile best. An investor should be guided in this choice by his investment objective.
STEP 4: OPEN A BROKERAGE ACCOUNT
A brokerage account – also known as taxable investment account – is similar to a retirement account, but more flexible. Where a retirement account has limitations on the amount of money that can be contributed annually, and restrictions on when funds can be withdrawn, a brokerage account is more flexible. The latter has no income or contribution limit and the investor can withdraw his money at any given time. This flexibility, together with its potential investment gains, makes a brokerage account more attractive to serious investors. Brokerage accounts are ideal for goals or savings that are further than five years away, but closer than retirement. It can also supplement an investor’s emergency savings.
STEP 5: COMMIT AND PURCHASE CAPITEC STOCKS / SHARES
Lastly, commit to the stock. Pro Tip: Monitor the value of your stock to ensure you have a growing stock value and dividend pay-out. Regularly check the share price online to ensure your investment delivers a positive return on investment. You are now a proud owner of CAPITEC stocks / shares.
5 Questions to ask yourself before purchasing any stocks or shares.
- Is it the best time to buy this stock / share?
- Should I buy CAPITEC stocks / shares in the current economic climate?
- Can I afford to buy this stock / share?
- What is the forecast of the stock / share growth?
- What is the current price per earning ration on the stock / share?
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