JSE:MTN

Stock Analysis Report

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Executive Summary

MTN Group Limited, together with its subsidiaries, operates in the telecommunications industry.


Snowflake Analysis

Fair value second-rate dividend payer.


Similar Companies

Share Price & News

How has MTN Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MTN's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

8.0%

MTN

1.6%

ZA Wireless Telecom

6.1%

ZA Market


1 Year Return

-46.4%

MTN

-12.7%

ZA Wireless Telecom

-20.8%

ZA Market

Return vs Industry: MTN underperformed the ZA Wireless Telecom industry which returned -12.7% over the past year.

Return vs Market: MTN underperformed the ZA Market which returned -20.8% over the past year.


Shareholder returns

MTNIndustryMarket
7 Day8.0%1.6%6.1%
30 Day17.3%1.9%6.9%
90 Day-23.9%-3.0%-3.0%
1 Year-41.0%-46.4%-5.8%-12.7%-9.3%-20.8%
3 Year-36.8%-48.6%-3.2%-19.4%8.2%-12.5%
5 Year-62.6%-73.7%-3.7%-30.0%15.2%-13.9%

Price Volatility Vs. Market

How volatile is MTN Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is MTN Group undervalued compared to its fair value and its price relative to the market?

11.67x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: MTN (ZAR58.2) is trading above our estimate of fair value (ZAR51.9)

Significantly Below Fair Value: MTN is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: MTN is good value based on its PE Ratio (11.7x) compared to the Wireless Telecom industry average (13.6x).

PE vs Market: MTN is poor value based on its PE Ratio (11.7x) compared to the ZA market (8.4x).


Price to Earnings Growth Ratio

PEG Ratio: MTN is good value based on its PEG Ratio (0.6x)


Price to Book Ratio

PB vs Industry: MTN is good value based on its PB Ratio (1.2x) compared to the XF Wireless Telecom industry average (2.2x).


Next Steps

Future Growth

How is MTN Group forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

18.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MTN's forecast earnings growth (18.3% per year) is above the savings rate (9.5%).

Earnings vs Market: MTN's earnings (18.3% per year) are forecast to grow slower than the ZA market (19.6% per year).

High Growth Earnings: MTN's earnings are forecast to grow, but not significantly.

Revenue vs Market: MTN's revenue (5.6% per year) is forecast to grow slower than the ZA market (8.3% per year).

High Growth Revenue: MTN's revenue (5.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MTN's Return on Equity is forecast to be low in 3 years time (17.8%).


Next Steps

Past Performance

How has MTN Group performed over the past 5 years?

-36.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MTN has high quality earnings.

Growing Profit Margin: MTN's current net profit margins (5.9%) are lower than last year (6.5%).


Past Earnings Growth Analysis

Earnings Trend: MTN's earnings have declined by -36.5% per year over the past 5 years.

Accelerating Growth: MTN's earnings growth over the past year (2.8%) exceeds its 5-year average (-36.5% per year).

Earnings vs Industry: MTN earnings growth over the past year (2.8%) underperformed the Wireless Telecom industry 7.5%.


Return on Equity

High ROE: MTN's Return on Equity (12.4%) is considered low.


Next Steps

Financial Health

How is MTN Group's financial position?


Financial Position Analysis

Short Term Liabilities: MTN's short term assets (ZAR76.3B) do not cover its short term liabilities (ZAR83.8B).

Long Term Liabilities: MTN's short term assets (ZAR76.3B) do not cover its long term liabilities (ZAR132.4B).


Debt to Equity History and Analysis

Debt Level: MTN's debt to equity ratio (109.5%) is considered high.

Reducing Debt: MTN's debt to equity ratio has increased from 39.9% to 109.5% over the past 5 years.

Debt Coverage: MTN's debt is well covered by operating cash flow (38.5%).

Interest Coverage: MTN's interest payments on its debt are not well covered by EBIT (2.9x coverage).


Balance Sheet


Next Steps

Dividend

What is MTN Group's current dividend yield, its reliability and sustainability?

9.45%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: MTN's dividend (9.45%) is higher than the bottom 25% of dividend payers in the ZA market (4.19%).

High Dividend: MTN's dividend (9.45%) is low compared to the top 25% of dividend payers in the ZA market (11.59%).


Stability and Growth of Payments

Stable Dividend: MTN's dividend payments have been volatile in the past 10 years.

Growing Dividend: MTN's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (110.3%), MTN's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MTN's dividends in 3 years are forecast to be covered by earnings (80.8% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.3yrs

Average management tenure


CEO

Rob Shuter (52yo)

3.25yrs

Tenure

R47,829,000

Compensation

Mr. Robert Andrew Shuter, also known as Rob, BCOMM, CA (SA), H DIP ACC, serves as Non-Executive Director of MTN Nigeria Communications PLC since April 13, 2017. Mr. Shuter has been Chief Executive Officer, ...


CEO Compensation Analysis

Compensation vs Market: Rob's total compensation ($USD2.84M) is about average for companies of similar size in the ZA market ($USD2.23M).

Compensation vs Earnings: Rob's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Robert Shuter
Group President3.25yrsR47.83m0.014% ZAR15.1m
Ralph Mupita
Group CFO & Executive Director3.17yrsR66.30m0.0052% ZAR5.5m
Jens Schulte-Bockum
Group Chief Operating Officer3.42yrsR23.90m0.0028% ZAR2.9m
Lele Modise
Group Chief Legal Counsel0.83yrR11.89mno data
Paul Norman
Group Chief Human Resources Officer23.42yrsR14.14m0.00056% ZAR586.0k
Felleng Sekha
Group Chief Regulatory & Corporate Affairs Officerno dataR10.40mno data
Ferdinand Moolman
Chief Executive Officer of MTN Nigeria5.42yrsR21.09mno data
Godfrey Motsa
Chief Executive Officer of MTN South Africa3.25yrsR15.65m0.0014% ZAR1.5m
Ebenezer Asante
Regional Vice President of Southern & East Africa and Ghana (SEAGHA)no dataR23.02mno data
Charles Molapisi
Group Chief Technology & Information Officer1.42yrsno datano data

3.3yrs

Average Tenure

52yo

Average Age

Experienced Management: MTN's management team is considered experienced (3.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Robert Shuter
Group President3.25yrsR47.83m0.014% ZAR15.1m
Ralph Mupita
Group CFO & Executive Director3.17yrsR66.30m0.0052% ZAR5.5m
Phuthuma Nhleko
Member of International Advisory Boardno dataR5.34mno data
Kandimathie Christine Ramon
Independent Non-Executive Director6yrsR1.27m0.00073% ZAR763.9k
Azmi Mikati
Independent Non-Executive Director13.92yrsR2.66mno data
Shaygan Kheradpir
Independent Non-Executive Director4.92yrsR2.65mno data
Charles Mbire
Chairman of MTN Ugandano datano datano data
Mcebisi Jonas
Independent Non-Executive Chairman0.50yrR1.28mno data
Khotso D. Mokhele
Lead Independent Non-Executive Director0.50yrR1.02mno data
Thabo Mbeki
Chair of International Advisory Boardno datano datano data

3.3yrs

Average Tenure

55.5yo

Average Age

Experienced Board: MTN's board of directors are considered experienced (3.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: MTN insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

MTN Group Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: MTN Group Limited
  • Ticker: MTN
  • Exchange: JSE
  • Founded: 1994
  • Industry: Wireless Telecommunication Services
  • Sector: Telecom
  • Market Cap: R104.644b
  • Shares outstanding: 1.80b
  • Website: https://www.mtn.com

Number of Employees


Location

  • MTN Group Limited
  • Innovation Centre
  • 216 14th Avenue, Fairland
  • Johannesburg
  • Gauteng
  • 2195
  • South Africa

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MTNO.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDAug 1995
MTNJSE (The Johannesburg Securities Exchange)YesOrdinary SharesZAZARAug 1995
LL6DB (Deutsche Boerse AG)YesOrdinary SharesDEEURAug 1995
MTNO.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDDec 2001
LL6ABST (Boerse-Stuttgart)SPONSORED ADRDEEURDec 2001

Biography

MTN Group Limited, together with its subsidiaries, operates in the telecommunications industry. The company offers mobile voice, international calling, roaming, closed user group, enterprise bundle, corporate APN, reverse bill URL, and enterprise mobility services. It also provides domestic and international MPLS, dedicated internet, business broadband, fiber to the business, carrier Ethernet, MS express route, AWS direct connect, managed LAN, and SD WAN services. Further, the company offers SIP tracking, multimedia conferencing, mobile PBX, cloud IVR, call recording, hosted call and contact center, and UCaaS services. Additionally, it provides cyber SOC, managed firewall, vulnerability assessment, device security, end point protection, penetration testing, and email security services. The company also offers cloud market place, O365, SaaS, backup, data center hosting, DBaaS, directory, domain management, DRaaS server virtualization, and web hosting services, as well as IoT connectivity, device management, IoT vertical application, and data analytics services. The company serves 251 million subscribers. MTN Group Limited was founded in 1994 and is based in Johannesburg, South Africa. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/06/06 19:55
End of Day Share Price2020/06/05 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.