Capitec has been, arguably, one of the beston the over the past 20 years. It was launched by PSG and on the in February 2002. Since then, it has become a disruptive powerhouse in the banking industry, consistently taking away from the four big in South Africa. By it is now more than double the size of Nedbank, 83% larger than ABSA, 6.3% bigger than Standard Bank and 69% of the size of FNB. And it is still growing rapidly. Consider the :
This chart is achart showing the of Capitec from its listing in February 2002. You will immediately see that the chart is what we call a “ ” because it goes from the bottom left-hand corner of your screen to the top right-hand corner. On 15th March 2002 you could have bought the share for just 90c. On Friday last week it touched an of just over R2000 per share.
We have been urging you to here.in Capitec since February 2018 just after the Viceroy Report came out when it was about R820 per share. We drew your attention to the fact that its (PEG) which was then 0,63 clearly showed that it was . Read the article
The PEG ratio compares a’s track record with its current (PE) to determine whether it represents good value at the current price. It achieves this by dividing the company’s P:E ratio by the average percentage growth in over a long period of time. In the following diagram we compare the percentage growth in (HEPS) from Capitec with that of FNB over the past 18 years:
This diagram shows that Capitec’s average growth in earnings over the 18 years back to 2003 has been 29,82% while FNB has managed only 11,97%. So, even though Capitec is trading on a much higher P:E (29,18) compared with FNB (12,41) it has a lower PEG ratio – which means that it remains better value, even at this high P:E.
On Wednesday last week (15th December 2021), Capitec published ain which it estimated that its HEPS will increase to at least 6940c in the year to end-February 2022. If we incorporate this number into our analysis, then Capitec’s average growth in HEPS over the 19 years is 32,2% and it is trading on a PEG of 0.9062 – making it even better value at the current price of 199940c.
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