MultiChoice Shares – Are They Worth It?

Founded in 1995, Multichoice is Africa’s leading entertainment company – it uses the power of entertainment to enhance people’s lives by showcasing fascinating local and international stories, bringing people together around a shared passion.

It operates through South Africa, the Technology segments, and the rest of Africa. It provides digital satellite television, digital content management, and protection systems to manage, protect, and monetize digital media on various platforms.

The content gets delivered through Multichoice Direct to Home (DTH), Digital Terrestrial Television (DTT), and online video entertainment services. Their entertainment platforms are Showmax, DStv, DStv Now, and Gotv, which are a hub for approximately 14 million people across 50 countries.

Multichoice is listed on the Johannesburg Stock Exchange and people can easily invest in it online. 

How to buy Multichoice shares?

If you are a beginner, I would advise you to start off by comparing share trading platforms. You need to go for the one with low commission, expert ratings, and investment tools to track your portfolio.

I have experience with EasyEquities so I can personally vouch for it as a good platform to use. Once you have done your comparison and have decided on the platform, you can complete the required details for your account and fund it.

You can search Multichoice by their code MCG, do further research on its history to make sure that your investment won’t be a bad move. It will be your choice to either purchase now or later and deciding on how many shares you want to buy.

If you decide to buy, you will have to constantly check on your investment.

Share Price Analysis 

Multichoice share price is currently around R118.84 and it is seen to be stable than 75% of ZA stocks over the past 3 months, typically moving +/-4% a week and it has been stable by 4% over the past year. Its share price is said to be undervalued compared to the fair value of R263.06, this means that MCG is trading below the fair value by more than 20%. 

Following is Multichoice latest consensus forecast view:

  • Market cap: 52,588,206,654
  • EPS - TTM: 495.99
  • P/E ratio: 23.96
  • Forward P/E: 12.7
  • Dividend yield: 4.75%
  • Last dividend: 5.65ZAR
  • Date of the last dividend: 2021/06/10
  • Return on equity: 42.85 %
  • Return on assets: 25.95 %
  • Net asset value: 2,910.07
  • Authorised shares: 0
  • Issued shares: 442,512,678

Future growth

MCG growth is predicted to be around 27.2% in the next 1 to 3 years which is above the savings rate of 9.2%. Overall, the earnings are expected to grow significantly over the next 3 years.

Over the past 5 years, MCG has been seen to be doing well with its annual earnings growth at 13.7% and its current net profit margins are 4.1% higher than last years’ 1%.

Are the shares worth it?

The share worthiness will vary depending on whether you are investing for the short or long term.

It is safe to say that the financial data does show positive growth for the company as it continues to strive and deliver popular content across different consumer segments.

Although the live online stock charts show a recent lag in the group’s share price, a change is predicted as consumer spending starts to increase, with more people buying Multichoice products. The group’s market presence, strong financials, and sound management strategy make Multichoice shares a good buy, promising long-term growth and positive returns.

It is however important to note that it's potential earning multiple is currently 23.68% which is above average and indicates that the share price is overvalued at the moment but, overall, it is a good buy if you are looking to hold long as there is a promising long-term growth.