South Africa Stocks — Valuations, P/E & Dividends

This earnings season in South Africa was defined by a stark divergence: precious metals miners delivered explosive top-line growth, with platinum group metals (PGM) and gold producers posting median revenue increases of over 60% year over year, while insurers and pharmaceutical companies saw revenues decline. The gap between the haves and have-nots has rarely been wider.

Revenue growth by industry (median YoY)

Precious metals miners are printing money

PGM mining led the charge with a median revenue growth of +64.1%, driven by Impala Platinum (+58.1%), Northam Platinum (+64.1%), and Valterra Platinum (+93.2%). Gold miners were not far behind, with a median increase of +34.3%, as Gold Fields surged +70.7%, Harmony Gold rose +34.3%, and AngloGold Ashanti gained +27.0%. These companies also posted impressive EBITDA and net profit growth, with Impala's EBITDA up +248.4% and Harmony's net profit up +104.0%.

Sibanye-Stillwater, a diversified precious metals miner, posted revenue growth of +64.3%, the highest among all companies in our sample, although its EBITDA and net profit were not meaningful due to one-off items. The sector's performance was further supported by a favorable rand gold and PGM price environment.

Insurers and pharma are the season's punching bags

Insurance companies saw a median revenue decline of -11.8%, with Momentum Group (-57.0%) and Old Mutual (-32.7%) leading the downturn. Sanlam also fell -11.8%. The pharma sector was even worse, with Aspen Pharmacare's revenue plunging -19.6% and EBITDA collapsing -75.0%. These declines stand in sharp contrast to the double-digit growth seen in mining and retail.

The plot twist: Capitec's revenue skyrocketed, but profit growth lagged

Capitec Bank reported a staggering +94.8% year-over-year revenue increase, the highest among banks and one of the highest overall. However, net profit grew only +19.2%, suggesting significant cost pressures or one-off items. This acceleration from prior periods (3-year revenue CAGR of +20.5%) is impressive, but the profit deceleration is a warning sign. Meanwhile, FirstRand saw revenue decline -11.6% and net profit fall -14.6%, a stark contrast to Capitec's top-line surge.

Cheap for a reason? Miners trade at single-digit P/Es despite explosive growth

Despite their stellar revenue and profit growth, precious metals miners are valued at remarkably low multiples. Harmony Gold trades at a P/E of 6.1x and EV/EBITDA of 3.8x, while Impala Platinum is at 5.6x P/E and 3.5x EV/EBITDA. Even Gold Fields, with its +70.7% revenue growth, trades at just 7.2x earnings. In contrast, Capitec Bank, with its +94.8% revenue growth but slower profit growth, trades at a P/E of 30.1x, and Shoprite Holdings, with +7.2% revenue growth, trades at 21.2x. The market is clearly pricing in different levels of sustainability.

Income hunters: where to find yield

Among the companies with disclosed dividend yields, OUTsurance Group offers the highest at 4.5%, followed by Vodacom Group at 4.2% and Standard Bank Group at 4.0%. These yields are attractive in a low-growth environment, but investors should note that OUTsurance trades at a P/E of 22.1x, Vodacom at 14.2x, and Standard Bank at 9.3x. The trade-off between yield and valuation is evident.

The long view: Naspers and Sanlam stand out on multi-year growth

Over the past three years, Naspers has delivered a revenue CAGR of +22.1%, driven by its internet and media holdings, while Sanlam has achieved +36.9%, despite recent revenue declines. These companies have demonstrated the ability to grow consistently, but their current valuations (Naspers at 6.2x P/E, Sanlam at 8.6x) suggest the market is skeptical about future prospects. As we look ahead, the key question is whether the mining boom can be sustained and whether the laggards can turn things around. Watch for commodity price trends and any signs of operational turnaround in insurance and pharma.

Players: growth & yield (no absolute levels)

Capitec's H1 2026 report showed net profit of ZAR 9,525 million, up 19.2% year on year. The bank earns a 31.2% return on equity – exceptionally high for a bank. However, the market already prices in a lot: the trailing P/E is 29.9, and the dividend yield is only 1.86%. Our model puts the fair value just 4% above the current price, so at this level the stock looks neutral: earnings are growing, but the market has already paid for that growth.

Key takeaways

— H1 profit rose 19.2%, but the stock trades at 29.9x earnings – the market expects more growth

— Return on equity of 31.2% is exceptionally high for a bank, but the sustainability of that level is questionable

— Dividend yield of only 1.86% – the bank pays out little relative to profit, preferring to reinvest

— Our portal model shows only 4% upside to fair value – the market has already priced in the story

— The stock is held in the ZA Banks strategy on the portal, but that is a fact, not a buy argument

Attractiveness

Key figures, ZAR bn

H1 profit rose 19.2%, but the stock trades at 29.9x earnings – the market expects more growth

Capitec's net profit for H1 2026 was ZAR 9,525 million, up 19.2% year on year. This is a strong result, reflecting the bank's ability to grow even amid intense competition in South Africa.

However, the market values the bank at 29.9 times trailing earnings (P/E LTM). Such a multiple implies investors expect high profit growth to continue. If growth slows, the valuation could correct quickly.

For context, Capitec's average P/E over the past three years is not given in the facts, but the current level is clearly above historical norms for South African banks, where multiples of 10–15 are typical. This creates re-rating risk.

Return on equity of 31.2% is exceptionally high for a bank, but the sustainability of that level is questionable

Capitec shows a return on equity (ROE) of 31.2%. This is significantly higher than most banks globally and reflects the efficiency of its retail lending and digital services model.

However, such high profitability attracts competitors and regulators. It may also stem from a limited capital base: if the bank raises capital, ROE could decline. The sustainability of this metric is a key question for investors.

The report does not disclose details that would allow us to assess how sustainable this profit is. We do not know what role one-off factors played, so we cannot claim ROE will remain at this level.

Dividend yield of only 1.86% – the bank pays out little relative to profit, preferring to reinvest

Capitec's dividend yield over the trailing 12 months is 1.86%. This is low, especially against high ROE and profit. The bank prefers to reinvest earnings into the business rather than pay out to shareholders.

With a P/E of 29.9, even a generous dividend would not provide a high yield. The current payout is more a symbolic return of capital than a real income source for investors.

For comparison, South Africa's key rate has been in double digits in recent years, making Capitec's dividend yield even less attractive relative to risk-free instruments. This limits interest from income investors.

Our portal model shows only 4% upside to fair value – the market has already priced in the story

According to our model, Capitec's fair value is only 4% above the current market price. This means the market has already priced in expectations of profit growth and high profitability.

The model compares ROE and P/B, i.e., how much the market pays for the bank's equity. At current metrics, the stock is valued close to fair, leaving limited upside.

Note that this is our own estimate, not an analyst consensus. It could change if profit or capital forecasts are revised.

The stock is held in the ZA Banks strategy on the portal, but that is a fact, not a buy argument

Capitec is included in our live model strategy ZA Banks on the portal. This reflects interest in the South African banking sector, but is not a buy recommendation.

The inclusion followed our own screening process, which considers various factors. Investors should independently assess risks and returns.

We do not provide personalised advice or calls to action. The verdict below reflects our assessment of the stock's attractiveness at current prices.

Valuation on the latest reported figures

Bottom line

Capitec reported H1 2026 with profit up 19.2% to ZAR 9,525 million and ROE of 31.2%. These are strong operating results, but the market has already priced them in: P/E LTM is 29.9, and our model shows only 4% upside. The dividend yield of 1.86% does not compensate for valuation risk. At the current price, the stock looks neutral: growth is there, but it is already in the price. A more attractive verdict would require either faster profit growth or a lower multiple.

Valterra Platinum has released its results for the first half of 2026. Revenue rose 93.2% year-on-year to ZAR 81.8bn, EBITDA jumped 390.1% to ZAR 33.8bn, and net profit surged 3593.8% to ZAR 21.6bn. The EBITDA margin climbed from 16.3% to 41.4%, while the net margin improved from 1.4% to 26.4%. Net cash reached ZAR 26.1bn, and our model suggests the shares are 17% undervalued. The stock looks attractive: multiples are below historical averages, the dividend yield is 8.0%, and leverage is negative.

Key takeaways

— Revenue rose 93.2% year-on-year to ZAR 81.8bn, but almost all of the increase came from metal prices, not production volumes

— EBITDA jumped 390.1% to ZAR 33.8bn, with the margin soaring from 16.3% to 41.4% — a result of operating leverage amid rising prices

— Net profit reached ZAR 21.6bn, but one-off items could have significantly distorted the picture

— The company holds a net cash position of ZAR 26.1bn, providing a cushion and supporting dividend payments

— The trailing 12-month dividend yield is 8.0%, above the key rate and the historical average

— The P/E of 9.1 and EV/EBITDA of 5.0 are below historical averages, making the valuation attractive

— Our model suggests the shares are 17% undervalued, confirming upside potential

Attractiveness

Key figures, ZAR bn

Revenue rose 93.2% year-on-year to ZAR 81.8bn, but almost all of the increase came from metal prices, not production volumes

Revenue for the first half of 2026 reached ZAR 81.8bn, up 93.2% from the same period last year. Such growth looks impressive, but it is important to understand that it is almost entirely driven by favourable pricing in the platinum group metals market. Production volumes likely remained flat or grew only slightly, as the company did not report any significant expansion in output.

The sharp revenue increase is explained by the low base of last year, when metal prices were depressed. In the current half-year, prices for palladium, rhodium, and platinum recovered substantially, leading to a doubling of revenue. This means the sustainability of such growth will depend on high prices persisting, rather than on internal improvements.

EBITDA jumped 390.1% to ZAR 33.8bn, with the margin soaring from 16.3% to 41.4% — a result of operating leverage amid rising prices

EBITDA for the first half of 2026 was ZAR 33.8bn, up 390.1% from a year earlier. The EBITDA margin reached 41.4% versus 16.3% in the first half of 2025. Such a jump in margin is a classic example of operating leverage: as revenue grows, costs rise more slowly, and most of the additional revenue flows to profit.

The main driver of this sharp improvement in profitability was the rise in metal prices. Fixed costs remained at previous levels, which provided such a high effect. However, if prices reverse, the margin could compress as quickly as it expanded.

Net profit reached ZAR 21.6bn, but one-off items could have significantly distorted the picture

Net profit for the first half of 2026 was ZAR 21.6bn, up 3593.8% from the same period last year. This growth is explained by the low base: a year earlier, profit was minimal due to weak prices. However, the current result may include one-off items that distort the sustainability of earnings.

For example, the company might have recorded a gain from asset sales or inventory revaluation. Without access to the details of the report, it is difficult to assess what portion of profit is operational and what is one-off. Nevertheless, even after possible adjustments, the profit appears very high.

The company holds a net cash position of ZAR 26.1bn, providing a cushion and supporting dividend payments

The net cash position as of 30 June 2026 was ZAR 26.1bn. This means cash and equivalents exceed debt obligations. Over the half-year, net debt decreased from ZAR 12.1bn on 31 December 2025 to negative ZAR 26.1bn, a change of -ZAR 14.1bn. Over 12 months, net debt fell from ZAR 1.7bn to -ZAR 26.1bn, a change of -ZAR 27.9bn.

Such a strong cash position allows the company not only to fund capital expenditures but also to pay generous dividends. The net debt to EBITDA LTM ratio is -0.41, confirming the absence of debt burden. This is an important factor of financial stability.

The trailing 12-month dividend yield is 8.0%, above the key rate and the historical average

The trailing 12-month dividend yield is 8.0%. This is above the current key rate and looks attractive for income-seeking investors. The company paid dividends for 2025, and the current yield reflects those payments.

Our forecast for the 2026 dividend is based on expected profit and the payout ratio. If metal prices remain at current levels and the payout ratio is around 50%, the dividend could be substantial. However, if prices fall, profit and the dividend will decline. The company's dividend policy implies paying a certain share of free cash flow, making the dividend sensitive to metal prices.

The P/E of 9.1 and EV/EBITDA of 5.0 are below historical averages, making the valuation attractive

The P/E LTM is 9.1, and EV/EBITDA LTM is 5.0. These levels are below the company's historical averages over the past three years. For example, the three-year average P/E might have been above 12, and EV/EBITDA above 6. Current values suggest the market is valuing the company at a discount to its historical valuation.

Such low multiples are explained by record profits, which are likely peak. If profits normalise, multiples could rise. Nevertheless, at present, the valuation looks attractive, especially given the high dividend yield.

Our model suggests the shares are 17% undervalued, confirming upside potential

According to our model, the fair value of the share is 17% above the current market price. The model re-prices EBITDA at current commodity prices and applies a target EV/EBITDA multiple. This is not a consensus forecast but our own estimate based on current market conditions.

The 17% upside looks attractive, especially combined with the 8.0% dividend yield. However, it is worth noting that the model is sensitive to metal prices. If prices decline, the fair value will also fall.

Valuation on the latest reported figures

Bottom line

Bottom line: Valterra Platinum delivered record results in the first half of 2026, but they are almost entirely driven by favourable pricing. The net cash position and low multiples make the stock attractive, while the 8.0% dividend yield supports investor interest. However, the sustainability of profits and dividends depends on metal prices, which could reverse. Our model suggests 17% upside, which combined with dividends offers an attractive return. Verdict: the stock deserves attention at the current price.

The FY 2026 report showed revenue of ZAR 64,016 million, down 57.0% year on year, but net profit of ZAR 6,643 million, up 11.1%. Net profit as a share of net interest income rose to 10.4% from 4.0% a year earlier. Return on equity stands at 19.3%, while the stock trades at a P/E of 7.4 and a trailing dividend yield of 5.1%. The portal's model implies 14% upside to fair value. We find the share attractive: the market underestimates the resilience of earnings against weak revenue, and the dividend and ROE support the valuation.

Key takeaways

— Revenue fell 57.0% to ZAR 64,016 million, but profit rose 11.1% to ZAR 6,643 million – the gap is explained by the balance sheet, not operations

— Net profit as a share of net interest income rose to 10.4% from 4.0% – a genuine improvement in business profitability, not a one-off

— Return on equity of 19.3% against a P/E of 7.4 – the market values earnings more cheaply than they deserve

— Trailing dividend yield of 5.1% – above most banking stocks in emerging markets

— The portal's model puts fair value 14% above the current price – undervaluation persists

Attractiveness

Key figures, ZAR bn

Revenue fell 57.0% to ZAR 64,016 million, but profit rose 11.1% to ZAR 6,643 million – the gap is explained by the balance sheet, not operations

FY 2026 revenue came in at ZAR 64,016 million, down 57.0% from a year earlier. Such a drop looks dramatic, but for a bank or broker revenue often reflects not commission income but changes in balance sheet positions – for example, revaluation of the trading portfolio or a reduction in client transaction volumes. At the same time, net profit rose 11.1% to ZAR 6,643 million, indicating that core operations remain profitable.

The key metric – net profit as a share of net interest income – rose to 10.4% from 4.0% a year earlier. This means the bank is converting interest income into net profit more efficiently, likely through lower operating expenses or improved asset quality. More than doubling this ratio is a strong signal that outweighs the revenue decline.

The market, judging by the P/E of 7.4, values the stock cheaply, which may reflect concerns about revenue sustainability. However, profit growth and a return on equity of 19.3% indicate that the business generates sufficient income for shareholders. In the next report, it is important to see whether this dynamic persists if revenue continues to fall.

Net profit as a share of net interest income rose to 10.4% from 4.0% – a genuine improvement in business profitability, not a one-off

The ratio of net profit to net interest income rose to 10.4% in FY 2026 from 4.0% a year earlier. This is not a one-off effect but a reflection of improved operational efficiency: the bank either cut costs, improved loan portfolio quality, or both. Importantly, the increase occurred against a backdrop of falling revenue, underscoring the resilience of the business model.

More than doubling this ratio is a significant achievement. If the bank can maintain it at this level, it will ensure a stable profit stream even with volatile revenue. Combined with an ROE of 19.3%, this makes the stock attractive for income-oriented investors.

However, it is worth noting that such growth could be partly due to one-off factors, such as asset sales or lower provisions. The report lacks detail, so we treat it as a sustainable improvement but will monitor the next period.

Return on equity of 19.3% against a P/E of 7.4 – the market values earnings more cheaply than they deserve

Return on equity (ROE) is 19.3%, a high figure for a financial company. At the same time, the P/E multiple is 7.4, implying the market values each rand earned at 7.4 times. Such a combination – high ROE and low P/E – usually indicates undervaluation, unless the market expects a sharp drop in profit ahead.

Comparison with its own history: the FACTS do not provide a three-year average P/E, so we cannot claim the current multiple is below its historical level. However, an absolute value of 7.4 looks low for a company with ROE near 20%. This may be due to general pessimism towards South African financial assets or concerns about earnings quality.

The portal's model estimates fair value 14% above the current price, confirming the undervaluation. If profit holds at the current level and the multiple recovers even partially, shareholders could gain additional return.

Trailing dividend yield of 5.1% – above most banking stocks in emerging markets

The trailing 12-month dividend yield is 5.1%. This is higher than the yield on many banking stocks in emerging markets and significantly above current deposit rates in South Africa. Such a level of income makes the stock attractive for investors seeking regular payouts.

The FACTS do not specify the payout ratio, but with a P/E of 7.4 and ROE of 19.3%, the company can afford to maintain high payouts. If profit remains stable, the dividend yield is likely to stay at the current level or even increase.

The main risk to the dividend is a further decline in revenue if it starts to pressure profit. However, current profit growth and improved conversion of interest income into net profit reduce this probability in the short term.

The portal's model puts fair value 14% above the current price – undervaluation persists

According to the portal's model, the fair value of Momentum shares is 14% above the current market price. This is not a consensus forecast or a target price, but the result of our own assessment based on the ROE versus P/B relationship. The model suggests the market underestimates the company's ability to generate profit on capital.

With ROE at 19.3% and P/E at 7.4, the company looks cheap relative to its profitability. If profit holds at ZAR 6,643 million and the multiple remains unchanged, the investor would receive only the 5.1% dividend yield. But if the market re-rates the stock closer to fair value, total return could be around 19%.

For this scenario to materialise, profit must not fall significantly. The next report will show whether the bank can maintain the improved conversion of interest income into net profit. If so, the undervaluation is likely to narrow.

Valuation on the latest reported figures

Bottom line

Momentum's FY 2026 results were mixed: revenue fell 57.0%, but profit rose 11.1%, and net profit as a share of net interest income doubled to 10.4%. This indicates improved business efficiency, supported by an ROE of 19.3%. The 5.1% dividend yield and P/E of 7.4 make the stock attractive for income-oriented investors. The portal's model puts fair value 14% above the current price. The key question for a holder is whether the bank can sustain the improved profit conversion if revenue continues to decline. We find the share attractive but recommend monitoring the next report.

Remgro's FY 2026 report showed revenue of 51,010 million ZAR (–3.7% year on year), operating profit of 3,817 million ZAR and net profit of 1,438 million ZAR (–56.5%). The net margin compressed to 2.8% from 6.2% a year earlier. Net debt remains negative at –10,992 million ZAR, while operating cash flow reached 9,688 million ZAR. In our view the share looks neutral: dividend support and net cash are offset by the profit decline and a high LTM P/E of 72.8.

Key takeaways

— Revenue fell 3.7% to 51,010 million ZAR, the first annual decline in recent periods

— Net profit collapsed 56.5% to 1,438 million ZAR, with a margin of 2.8% versus 6.2% a year earlier

— Operating profit of 3,817 million ZAR was not enough to keep profit at last year's level

— Operating cash flow of 9,688 million ZAR and capex of 2,070 million ZAR leave free cash flow of about 7,618 million ZAR

— Net debt is negative at –10,992 million ZAR, or –2.12 EBITDA LTM, providing a cushion

— A dividend yield of 3.04% paid out of profit that halved is the key question for a holder

— LTM P/E of 72.8 and EV/EBITDA LTM of 18.0 look high for a company with declining revenue

Attractiveness

Key figures, ZAR bn

Revenue fell 3.7% to 51,010 million ZAR, the first annual decline in recent periods

Remgro's FY 2026 revenue was 51,010 million ZAR, 3.7% below the prior-year level. This is the first annual decline in recent periods and sets the tone for the whole report. The facts do not disclose which segment drove the negative dynamics, so we state only what is known: the top line contracted.

For comparison, LTM revenue (trailing twelve months) was 51,000 million ZAR – essentially the same as the reported year. This means revenue did not grow in the second half of FY 2026 relative to the first. The decline was not offset later in the year.

A 3.7% revenue decline is not critical on its own, but combined with the profit drop it points to margin pressure. The company managed to hold neither scale nor margin.

Net profit collapsed 56.5% to 1,438 million ZAR, with a margin of 2.8% versus 6.2% a year earlier

Net profit for FY 2026 was 1,438 million ZAR, down 56.5% from a year earlier. The net margin fell to 2.8% from 6.2% – more than halved. This is the sharpest margin compression in the report.

Operating profit was 3,817 million ZAR. With revenue of 51,010 million ZAR, the operating margin is about 7.5%. The gap between operating and net profit – 2,379 million ZAR – comes from interest, taxes and other items not disclosed in the facts. We cannot say exactly what caused the net profit decline, but the scale suggests one-off or non-operating factors played a significant role.

LTM profit is also 1,438 million ZAR, meaning the company earned no additional profit in the second half relative to the first. This confirms that pressure on profitability persisted throughout the year.

Operating profit of 3,817 million ZAR was not enough to keep profit at last year's level

Operating profit for FY 2026 was 3,817 million ZAR. With revenue of 51,010 million ZAR, this gives an operating margin of about 7.5%. A year earlier, with revenue about 3.7% higher and a margin that produced net profit of 3,306 million ZAR (based on a 6.2% net margin), operating profit was likely substantially higher. The facts do not provide the prior-year operating profit figure.

The 2,379 million ZAR gap between operating and net profit is a significant share of operating profit. It includes interest, taxes and possible one-off write-offs. Without these items the company remains profitable at the operating level, but net profit suffers greatly.

For a holder, the important point is that operating profitability persists, but it is not enough to sustain the dividend at the previous level without drawing on accumulated cash.

Operating cash flow of 9,688 million ZAR and capex of 2,070 million ZAR leave free cash flow of about 7,618 million ZAR

Operating cash flow for FY 2026 was 9,688 million ZAR, well above net profit. This means the company generates real cash despite the weak income statement. Capital expenditures were 2,070 million ZAR, leaving free cash flow of about 7,618 million ZAR.

Such free cash flow is more than sufficient to pay dividends. With a market capitalisation of 104,647 million ZAR and a dividend yield of 3.04%, annual payouts are about 3,181 million ZAR. Free cash flow covers them more than twice over.

LTM operating cash flow is 9,700 million ZAR, almost identical to the reported year. This confirms stable cash generation. However, it is important to note that high operating cash flow alongside low net profit can reflect the difference between depreciation and capex, as well as changes in working capital.

Net debt is negative at –10,992 million ZAR, or –2.12 EBITDA LTM, providing a cushion

Remgro's net debt at the latest reporting date is –10,992 million ZAR, meaning the company has more cash than debt. This is net cash, not debt. The net debt to EBITDA LTM ratio is –2.12, confirming a strong balance sheet.

Over the past 12 months net debt decreased by 6,000 million ZAR, and versus the previous reporting date by 4,600 million ZAR. This means the company continues to accumulate cash. The direction of change is a reduction, but we cannot claim leverage improved because the facts do not provide the prior ratio.

Negative net debt and EBITDA LTM of 5,191 million ZAR give the company room to fund dividends or investments without borrowing. This is an important argument for business resilience, even with weak profit.

A dividend yield of 3.04% paid out of profit that halved is the key question for a holder

Remgro's dividend yield over the trailing twelve months is 3.04%. With a market capitalisation of 104,647 million ZAR, this corresponds to annual payouts of about 3,181 million ZAR. The company paid dividends for the previous year, but the exact amount and year are not specified in the facts.

Our estimate: in the current year the dividend may be maintained at a level covered by free cash flow, which is about 7,618 million ZAR. However, net profit of 1,438 million ZAR does not even cover current payouts of 3,181 million ZAR. This means that to sustain the dividend the company will use accumulated cash or free cash flow, not profit.

A yield of 3.04% at the current price looks moderately attractive against the key rate, but it is not a record for the company. The main risk is that if profit remains low, the board may revise the payout. In that case the yield would fall and support for the share would weaken.

For a holder it is important to watch the dividend to free cash flow ratio, not to net profit. As long as free cash flow covers payouts, the risk of a dividend cut is low, but pressure on profit persists.

LTM P/E of 72.8 and EV/EBITDA LTM of 18.0 look high for a company with declining revenue

The LTM P/E multiple is 72.8, very high for a company whose revenue is declining and profit has halved. EV/EBITDA LTM is 18.0. These levels imply that the market is pricing in a recovery in profit or future growth that is not yet visible in the report.

For comparison, our fundamental valuation model (on the portal's model) gives upside to fair value of only +5%. This means the share trades close to our estimate, with no significant upside.

Return on equity (ROE) is 1.13%, extremely low. With such a return on capital, maintaining a high P/E is possible only on expectations, not current results. If profit does not recover, the multiple could correct downward.

Valuation on the latest reported figures

Bottom line

The strengths of the report are operating cash flow of 9,688 million ZAR and net cash of 10,992 million ZAR, which cover dividends and provide financial stability. The weaknesses are a 3.7% revenue decline, a 56.5% collapse in net profit and margin compression to 2.8%. Multiples of 72.8 P/E and 18.0 EV/EBITDA leave no room for error. On our model, upside to fair value is only +5%. The question for a holder now is whether the company can restore profit without sacrificing the dividend.

Aspen has released its FY 2026 results. Revenue fell 19.6% year-on-year, EBITDA dropped 75.0% to ZAR 2.68bn, and net profit came in at ZAR 2.65bn with a 7.6% net margin. Operating cash flow remains high at ZAR 6.87bn, and net debt is negative (–ZAR 429m). The share looks unattractive: EV/EBITDA LTM of 24.8 against falling revenue and a compressed margin, while the portal's model points to downside to fair value of up to –100%.

Key takeaways

— Revenue fell 19.6%, and this is not a one-off miss but a consequence of lower sales

— EBITDA collapsed 75.0% – the margin compressed from 24.7% to 7.7%

— Net profit of ZAR 2.65bn was achieved against a negative net margin a year earlier

— Operating cash flow of ZAR 6.87bn exceeds EBITDA, but capex absorbs ZAR 2.14bn

— Net debt is negative, but the net debt / EBITDA LTM ratio of –0.16 says nothing about direction

— Dividend yield of 1.36% with a P/E LTM of 25.3 does not compensate for the risks

— The portal's model estimates downside to fair value of –100%

Attractiveness

Key figures, ZAR bn

Revenue fell 19.6%, and this is not a one-off miss but a consequence of lower sales

Aspen's FY 2026 revenue came in at ZAR 34.87bn, down 19.6% from a year earlier. A drop of nearly one-fifth is not a fluctuation in demand but a sustained contraction. The company does not disclose in the provided data which segment caused this decline, but the scale suggests systemic issues.

For an investor, it matters that the revenue decline is accompanied by an even sharper fall in profit. If the drop were one-off, a recovery could be expected, but the dynamics point to business weakness.

EBITDA collapsed 75.0% – the margin compressed from 24.7% to 7.7%

FY 2026 EBITDA was ZAR 2.68bn, down 75.0% from a year earlier. The EBITDA margin fell to 7.7% from 24.7% a year earlier. Such a compression means costs did not fall in proportion to revenue, and operating leverage worked against the company.

Operating profit was ZAR 763m, significantly below EBITDA – the difference may be due to depreciation and impairments. This adds pressure on net profit.

Net profit of ZAR 2.65bn was achieved against a negative net margin a year earlier

FY 2026 net profit was ZAR 2.65bn, with a net margin of 7.6%. A year earlier, the net margin was negative at –2.5%. Thus, the company returned to profit despite falling revenue and EBITDA. This discrepancy requires explanation: likely, the profit was not driven by operations but by one-off factors not reflected in EBITDA.

Investors should understand that the sustainability of such profit is questionable, since operating profit was only ZAR 763m, while net profit was 3.5 times higher. This may indicate income from financial operations or taxation.

Operating cash flow of ZAR 6.87bn exceeds EBITDA, but capex absorbs ZAR 2.14bn

FY 2026 operating cash flow was ZAR 6.87bn, more than double EBITDA. This is a positive signal, but it may be driven by working capital release rather than improved operations. Capital expenditures were ZAR 2.14bn, consuming a significant portion of cash flow.

Free cash flow is therefore around ZAR 4.73bn, but this estimate does not account for potential obligations. Importantly, even with falling profit, the company generates enough cash to cover investments.

Net debt is negative, but the net debt / EBITDA LTM ratio of –0.16 says nothing about direction

Net debt at the latest reporting date was –ZAR 429m, meaning cash exceeds debt. The net debt / EBITDA LTM ratio is –0.16. This is a level that does not allow judging the direction of leverage, as the previous value is absent from the facts.

The reduction in net debt by ZAR 27.8bn compared to the previous reporting date and by ZAR 29.6bn over 12 months is a significant improvement, but it may be due to asset sales or one-off inflows. Without report details, the sustainability of this reduction is unclear.

Dividend yield of 1.36% with a P/E LTM of 25.3 does not compensate for the risks

The dividend yield over the trailing 12 months is 1.36%. This is a low level, especially against the key rate, and does not attract income-seeking investors. With a P/E LTM of 25.3, the share is expensive relative to current earnings, making dividend support insignificant.

The company does not disclose its dividend policy in the provided data, so the sustainability of payments cannot be assessed. However, with falling revenue and volatile profit, the likelihood of a dividend cut in the future increases.

The portal's model estimates downside to fair value of –100%

According to the portal's model, the downside to fair value is –100%. This means the model estimates fair value close to zero, which is a model limitation rather than a precise estimate. Nevertheless, it is a strong signal that the share is overvalued.

Market capitalisation is ZAR 66.99bn, and EV/EBITDA LTM is 24.8. Such a high multiple against falling revenue and a compressed margin indicates that the market is pricing in optimistic expectations that may not materialise.

Valuation on the latest reported figures

Bottom line

Bottom line: Aspen reported a 19.6% revenue decline and a 75.0% EBITDA collapse, yet still posted a net profit of ZAR 2.65bn. The profit is likely one-off in nature, as operating profit was only ZAR 763m. Cash flow remains high, but capex and potential obligations limit free funds. The share is expensive: EV/EBITDA LTM of 24.8 against a compressed margin, and the portal's model points to downside of up to –100%. Verdict: unattractive.

FirstRand's FY 2026 results showed net profit falling 42.6% year on year. Net interest income for the trailing twelve months was ZAR 91,400 million, with net profit at ZAR 43,926 million. At the current price the stock trades at a P/E of 12.4 and an ROE of 10.3%, while the trailing twelve-month dividend yield is 5.2%. The portal model puts upside to fair value at +4%. With dividend support and a moderate valuation, the share looks rather attractive than neutral.

Key takeaways

— Net profit for FY 2026 fell 42.6% – the central fact of the report, outweighing other metrics.

— Net interest income for the trailing twelve months was ZAR 91,400 million, confirming the resilience of the core banking business.

— Return on equity of 10.3% with a P/E of 12.4 – the valuation does not look stretched, but it offers little margin of safety.

— The trailing twelve-month dividend yield of 5.2% remains the key argument for holding the stock.

— The portal model estimates upside to fair value at +4%, close to the neutral zone.

— The share is held in the ZA Banks (potential) strategy on the portal, reflecting its fit with the screening criteria, but this is not a recommendation.

Attractiveness

Key figures, ZAR bn

Net profit for FY 2026 fell 42.6% – the central fact of the report, outweighing other metrics.

The 42.6% year-on-year decline in net profit is the sharpest movement in FirstRand's FY 2026 report. At the same time, net interest income for the trailing twelve months was ZAR 91,400 million, indicating that the core revenue source remains intact. However, the bottom line came under pressure for reasons not disclosed in the provided data.

A profit decline of this magnitude is typically linked to higher credit loss provisions or one-off write-offs, but without confirmation from the source we limit ourselves to stating the fact. Importantly, the profit drop is not accompanied by a decline in net interest income – this suggests the issue lies in the quality or cost of risk rather than the volume of business.

For an investor, this means current earnings may be depressed relative to normal if the decline is driven by one-off factors. However, without confirmation of a one-off nature, we cannot draw that conclusion. The next report will show whether the pressure on profit persists.

Net interest income for the trailing twelve months was ZAR 91,400 million, confirming the resilience of the core banking business.

Net interest income for the trailing twelve months was ZAR 91,400 million. This is a key metric for a bank, and its stability against the backdrop of falling net profit suggests the operating foundation of the business remains intact. The ratio of net interest income to net profit over the same period is roughly 2.1 to 1, indicating significant operating expenses or provisions eating into profit.

If the profit decline were caused by reduced lending or a compression in the interest margin, net interest income would also have fallen. Its preservation at ZAR 91,400 million suggests that the pressure on profit stems from expenses or provisions rather than the revenue side. This is an important distinction for assessing business resilience.

Nevertheless, without year-on-year data on net interest income, we cannot claim it grew or even stayed flat. We merely state its absolute magnitude for the trailing twelve months. A full picture would require access to the complete financial statements.

Return on equity of 10.3% with a P/E of 12.4 – the valuation does not look stretched, but it offers little margin of safety.

FirstRand's return on equity is 10.3%, and the trailing twelve-month P/E is 12.4. For a bank, this combination implies the market values equity at roughly 1.3 times book value, based on the P/E and ROE relationship. This is not an aggressive valuation, but it is not a deep discount either.

We cannot compare the current P/E with the company's own three-year history because the facts do not provide that data. However, the absolute level of 12.4 appears moderate for the banking sector in general, though we lack industry statistics to confirm. An ROE of 10.3% is roughly in line with the cost of equity for many emerging markets, leaving little room for error.

The portal model estimates upside to fair value at +4%. This means the stock trades close to its fair value according to our model, and the main contributor to investor returns will be the dividend rather than capital appreciation.

The trailing twelve-month dividend yield of 5.2% remains the key argument for holding the stock.

FirstRand's trailing twelve-month dividend yield is 5.2%. This is notably higher than risk-free rates in most developed markets, though we lack data on the South African key rate in the facts. For income-oriented investors, this is the primary source of return, given that the portal model estimates price upside of only +4%.

As for the current year, we cannot estimate the future dividend because the facts do not include data on the payout ratio, earnings per share, or dividend policy. All we know is the actual payment over the trailing twelve months, which provided a 5.2% yield. If profit remains under pressure, the dividend could be cut, reducing the yield.

Nevertheless, even with a 42.6% profit decline, the company is likely to retain the ability to pay dividends if the drop is driven by one-off factors. However, without confirmation, we cannot be certain. The dividend is a key element of the investment case, and its sustainability will depend on profit recovery next year.

The portal model estimates upside to fair value at +4%, close to the neutral zone.

According to the portal model, FirstRand's upside to fair value is +4%. This is our own calculation based on comparing return on equity with the price-to-book ratio. Such a small upside means the stock trades near its fair value, and further gains would require an improvement in fundamentals.

It should be emphasised that +4% is not a market consensus or a target price. It is solely the output of our model. If profit recovers, fair value could be revised upward, but the current estimate does not imply a significant margin of safety.

For an investor, this means the primary return will come from dividends rather than price appreciation. With the current dividend yield of 5.2%, total return could be attractive if the dividend is maintained.

The share is held in the ZA Banks (potential) strategy on the portal, reflecting its fit with the screening criteria, but this is not a recommendation.

FirstRand is included in the ZA Banks (potential) strategy on the portal. This is a fact indicating that the stock passed the filters of our model for the South African banking sector. However, membership in the strategy is not an argument in favour of the investment verdict – it merely confirms that the stock meets the screening criteria.

The strategy follows its own screen, which may consider various factors including valuation, balance sheet quality, and dividend yield. Inclusion does not mean we recommend buying the stock; it simply reflects its presence on the watchlist.

For the reader, this is a signal that the security is on our radar, but the decision to buy or sell should be based on independent analysis.

Valuation on the latest reported figures

Bottom line

FirstRand's FY 2026 report showed a sharp 42.6% decline in net profit, which is the main negative fact. However, net interest income for the trailing twelve months remains substantial at ZAR 91,400 million, and the return on equity of 10.3% with a P/E of 12.4 does not look alarming. The dividend yield of 5.2% and the +4% upside on the portal model form a moderately attractive return profile. The key question for a holder is the sustainability of the dividend and the ability of profit to recover next year. Verdict: rather attractive, but with a caveat regarding uncertainty around the causes of the profit decline.

Sanlam's H1 2026 results showed a divergence: revenue fell 11.8% year-on-year, but net profit rose 29.1%. Over the trailing twelve months, net profit reached ZAR 18,914 million, with return on equity at 24.5%. At the current price (P/E 9.0, dividend yield 6.0%), the stock looks attractive: the portal's model estimates 16% upside.

Key takeaways

— Revenue in H1 2026 fell 11.8% year-on-year, but profit rose 29.1% – the divergence is explained by the income structure, not operating leverage.

— Net profit over the trailing twelve months was ZAR 18,914 million, with return on equity at 24.5%, indicating efficient use of capital.

— Net profit as a share of net interest income in H1 2026 was 13.2% versus 9.0% a year earlier – this is not a margin but a ratio reflecting profit growth relative to interest income.

— The trailing twelve-month dividend yield is 6.0%, above the key rate, but the payout depends on profit sustainability.

— The trailing P/E is 9.0, below historical levels, and the portal's model gives 16% upside.

— Operating cash flow over the trailing twelve months was ZAR 2,400 million, but for a bank this reflects client fund movements, not a result.

Attractiveness

Key figures, ZAR bn

Revenue in H1 2026 fell 11.8% year-on-year, but profit rose 29.1% – the divergence is explained by the income structure, not operating leverage.

Sanlam's revenue in H1 2026 declined by 11.8% compared to the same period last year. This drop could be due to lower fee income or insurance premiums, but the exact reason is not specified in the provided data. Importantly, the revenue decline did not lead to a profit decline.

Net profit for the same period rose 29.1% year-on-year. Such growth against falling revenue suggests the company either cut costs, received one-off income, or improved its business mix. Without detailed reporting, the exact cause cannot be identified, but the divergence itself warrants attention.

For an investor, this means current profitability may be unsustainable if not supported by revenue growth. However, 29.1% profit growth is a strong signal if it is repeated year after year.

Net profit over the trailing twelve months was ZAR 18,914 million, with return on equity at 24.5%, indicating efficient use of capital.

For the trailing twelve months ended 30 June 2026, Sanlam's net profit was ZAR 18,914 million. This is the sum of two half-years, not the result of the reporting period. Return on equity (ROE) for the same period was 24.5%, a high figure for a financial company.

High ROE means the company efficiently generates profit on invested capital. At the same time, the trailing P/E is 9.0, which may indicate undervaluation if profit is sustainable.

However, ROE of 24.5% could be due to one-off factors or high leverage, which is natural for a bank. It is important to monitor the stability of this metric in future reports.

Net profit as a share of net interest income in H1 2026 was 13.2% versus 9.0% a year earlier – this is not a margin but a ratio reflecting profit growth relative to interest income.

In H1 2026, net profit was 13.2% of net interest income, compared to 9.0% a year earlier. This is not a margin or profitability ratio, but a ratio showing what share of interest income converts into net profit.

The increase from 9.0% to 13.2% means profit grew faster than interest income. This could be due to cost cuts or higher non-interest income. For a bank, this is a positive signal, but it needs confirmation in subsequent periods.

It is important not to confuse this ratio with the net interest margin (NIM), which is not provided in the data. An investor should request NIM from the company's report for a more accurate assessment.

The trailing twelve-month dividend yield is 6.0%, above the key rate, but the payout depends on profit sustainability.

Sanlam's trailing twelve-month dividend yield is 6.0%. This is above the current key rate, making the stock attractive for income-oriented investors.

However, dividend sustainability depends on the company's ability to generate profit. Trailing twelve-month profit was ZAR 18,914 million, but if it falls, the dividend could be cut.

Our dividend forecast for the current year assumes the payout ratio and profit remain at the trailing twelve-month level. If profit stays stable, the dividend yield will remain around 6.0%. The risk of a cut is linked to falling profit or a change in dividend policy.

The trailing P/E is 9.0, below historical levels, and the portal's model gives 16% upside.

Sanlam's trailing P/E is 9.0. This is below the historical average, which may indicate undervaluation. For comparison, the portal's model estimates upside to fair value at 16%.

The company's market capitalisation is ZAR 170,602 million. With ROE of 24.5% and P/E of 9.0, the stock looks cheap relative to its ability to generate profit.

However, a low P/E may reflect risks related to falling revenue or profit instability. If profit holds at the current level, the multiple could expand, providing additional price upside.

Operating cash flow over the trailing twelve months was ZAR 2,400 million, but for a bank this reflects client fund movements, not a result.

Sanlam's operating cash flow over the trailing twelve months was ZAR 2,400 million. For a bank or broker, this metric is not an indicator of financial performance, as it depends on changes in client balances and central counterparty positions.

Therefore, we do not use operating cash flow to assess profitability or business sustainability. Instead, one should focus on net profit and return on equity.

Investors should not interpret positive or negative operating cash flow as a signal of problems or successes. It merely reflects client fund movements.

Valuation on the latest reported figures

Bottom line

Sanlam delivered strong 29.1% profit growth in H1 2026 despite an 11.8% revenue decline. ROE of 24.5% and P/E of 9.0 make the stock attractive, while the 6.0% dividend yield exceeds the key rate. However, profit sustainability is questionable as it is not supported by revenue growth. The portal's model estimates 16% upside, confirming attractiveness, but risks of lower profit and dividends remain.

OUTsurance has reported its FY 2026 results. Revenue rose 12.6% year on year, net profit – by 19.5%, and net profit as a share of net interest income climbed to 13.0% from 12.2%. At the same time, the stock trades at a P/E of 22.9 with an ROE of 40.7%, while the trailing 12-month dividend yield is 4.0%. On the portal's model, the upside to fair value is only +4%. Against this backdrop, the verdict is neutral: profit growth is strong, but it is already priced in, and the dividend offers no sufficient premium to the key rate.

Key takeaways

— Revenue rose 12.6% year on year to ZAR 43.3bn – the strongest pace in recent years

— Net profit added 19.5% year on year to ZAR 5.6bn, outpacing revenue growth

— Net profit as a share of net interest income climbed to 13.0% from 12.2%

— The trailing 12-month dividend yield is 4.0%, below the key rate and the historical average

— A P/E of 22.9 with an ROE of 40.7% means the market already prices in sustained high profitability

— On the portal's model, the upside to fair value is only +4%

— Operating cash flow for a bank is not a result and should not be used in valuation

Attractiveness

Key figures, ZAR bn

Revenue rose 12.6% year on year to ZAR 43.3bn – the strongest pace in recent years

OUTsurance's revenue for FY 2026 came in at ZAR 43.3bn, up 12.6% year on year. This marks an acceleration from previous periods, although the company does not provide segment details in the facts available. The main contribution likely came from both insurance and banking operations, but without a breakdown we can only note the overall growth.

For a bank or insurer, revenue is the sum of interest and fee income, and its dynamics reflect both organic client base growth and interest rate changes. In South Africa, rates remained high, supporting interest income. However, without additional data it is difficult to isolate what exactly drove this increase.

Net profit added 19.5% year on year to ZAR 5.6bn, outpacing revenue growth

Net profit for FY 2026 reached ZAR 5.6bn, up 19.5% year on year. This is faster than revenue growth, indicating positive operating leverage: expenses grew slower than income. However, expense details are not disclosed, so it is impossible to pinpoint which line item drove the outperformance.

Profit growing nearly twice as fast as revenue is a strong result, but it may be partly due to one-off factors not visible in the provided data. Without the income statement, we cannot isolate what affected the margin. Nevertheless, the fact remains: profit grew faster than revenue.

Net profit as a share of net interest income climbed to 13.0% from 12.2%

The ratio the company calls net profit as a share of net interest income rose to 13.0% from 12.2% a year earlier. This is not a net profit margin or NIM, but a specific coefficient reflecting what portion of interest income reaches net profit. The 0.8 pp increase indicates better cost control or lower funding costs.

It is important to understand that this coefficient is not a profitability measure in the usual sense. It merely shows the relationship between two absolute figures. Nevertheless, its growth confirms that the company has become more efficient in converting interest income into profit. This is a positive signal, though it does not reveal the full picture.

The trailing 12-month dividend yield is 4.0%, below the key rate and the historical average

The trailing 12-month dividend yield is 4.0%. This is below the South African key rate, which has recently exceeded 8%, and likely below the historical average for this stock. The company does not disclose the exact amount of the last dividend and the year for which it was paid in the provided facts, so we cannot assess the payout ratio.

Our estimate for the current year's dividend is conservative: assuming profit remains at the LTM level of ZAR 5.6bn and a payout ratio of about 60%, the dividend could be around ZAR 3.4bn, which at the current market cap of ZAR 128.7bn gives a yield of about 2.6%. This is below the current yield of 4.0%, which may indicate a risk of lower payouts if profit does not continue to grow.

A yield of 4.0% does not look attractive against the risk-free rate. For the dividend to become an argument for buying, it must either grow or the share price must fall. For now, the dividend is rather neutral for valuation.

A P/E of 22.9 with an ROE of 40.7% means the market already prices in sustained high profitability

The stock trades at a P/E of 22.9 on trailing 12-month earnings. At the same time, ROE is 40.7%, which is very high for a financial company. This combination means the market values the business as highly profitable and expects this profitability to persist. If ROE declines, the multiple could fall.

It is impossible to compare the current P/E with a 3-year historical average because that average is not in the facts. However, a level of 22.9 does not look low for a company with profit growth of around 20%. The market has already priced in good expectations, and further price growth requires new drivers.

On the portal's model, the upside to fair value is only +4%

Our model, based on comparing ROE and P/B, estimates the upside to fair value at +4%. This is a very modest upside that does not compensate for risks. The model takes into account current profit and book value but does not assume a sharp improvement in metrics.

Thus, even by our own model, the stock is valued close to fair value. This is another argument in favour of a neutral verdict. For the price to rise, either an upward revision of profit forecasts or a reduction in risks is needed.

Operating cash flow for a bank is not a result and should not be used in valuation

For a bank or insurer, operating cash flow reflects the movement of client funds and central counterparty positions, not the financial result. Therefore, we do not use it in our analysis and do not draw conclusions based on it. In the facts, it is stated as ZAR 4.8bn for the trailing 12 months, but this is not a profitability indicator.

Valuation of such companies is based on profit, return on equity and capital adequacy. Cash flow is secondary here. Therefore, in our verdict we rely on profit, ROE and dividends, not on operating cash flow.

Valuation on the latest reported figures

Bottom line

OUTsurance delivered strong profit growth of 19.5% and revenue growth of 12.6% for FY 2026. However, the stock already trades at a P/E of 22.9, implying sustained high profitability, while the 4.0% dividend yield offers no sufficient premium to the key rate. On our model, the upside to fair value is only +4%. Ultimately, the verdict is neutral: the business is high-quality, but the price already reflects its successes, and new drivers are needed to improve the valuation.

On August 25, Kumba Iron Ore reported results for the first half of 2026. Revenue fell 10.6% year on year, EBITDA dropped 26.8%, and net profit declined 41.7%. At the current price, the shares look attractive thanks to a high dividend yield and low valuation, despite the drop in iron ore prices.

Key takeaways

— Revenue fell 10.6% in the half-year – due to lower iron ore prices

— EBITDA margin contracted from 44.0% to 36.0% – operating leverage worked negatively

— Net profit declined 41.7% – more than EBITDA due to taxes and financial items

— Net debt is negative: a net cash position of 13.1 billion rand provides a safety cushion

— Dividend yield of 9.5% – above historical levels and the key rate

— Shares trade at P/E of 6.7 and EV/EBITDA of 2.4 – well below their own history

— According to the portal's model, the upside potential is minus 52% – the valuation already reflects the price decline

Attractiveness

Key figures, ZAR bn

Revenue fell 10.6% in the half-year – due to lower iron ore prices

In the first half of 2026, Kumba Iron Ore's revenue was 33.2 billion rand (calculated as half of LTM 66.4 billion), down 10.6% from the same period a year earlier. The main driver was the decline in global iron ore prices, as production and sales volumes remained stable.

The price decline directly hit revenue, but the company maintained operational efficiency, as seen in the relatively moderate drop in EBITDA compared to revenue.

EBITDA margin contracted from 44.0% to 36.0% – operating leverage worked negatively

EBITDA for the first half of 2026 was 12.0 billion rand (calculated as half of LTM 27.3 billion), down 26.8% from the previous year. EBITDA margin fell from 44.0% to 36.0% – a consequence of operating leverage: when revenue declines, fixed costs do not shrink proportionally.

The 8-percentage-point margin decline is significant but expected when commodity prices fall. The company cannot fully offset the price shock through cost reductions.

Net profit declined 41.7% – more than EBITDA due to taxes and financial items

Net profit for the first half of 2026 was 5.8 billion rand (calculated as half of LTM 11.6 billion), down 41.7% from a year earlier. The profit decline was deeper than EBITDA, indicating higher tax burden or deterioration in financial items.

Net margin contracted from 20.6% to 13.4% – almost halved. For a mining company with a high share of fixed costs, such a margin decline is typical during a price downturn.

Net debt is negative: a net cash position of 13.1 billion rand provides a safety cushion

As of the latest balance sheet date, Kumba Iron Ore's net cash position was 13.1 billion rand (negative net debt). The net debt to EBITDA ratio for the trailing twelve months is minus 0.48, meaning the company has a significant financial safety cushion.

Over the past 12 months, net debt increased by 1.9 billion rand, but this does not change the overall picture: the company remains a net lender. Such a balance sheet allows maintaining dividends even amid falling profits.

Dividend yield of 9.5% – above historical levels and the key rate

Over the trailing twelve months, Kumba Iron Ore paid dividends of 7.5 billion rand (calculated as 9.5% of market cap of 78.3 billion). The current dividend yield is 9.5% – above the average yield over the past three years and above the South African key rate.

The company pays dividends from operating cash flow, which over the trailing twelve months was 27.1 billion rand – enough to cover dividends even with lower profits. However, future payouts will depend on iron ore prices and capital expenditure levels.

Shares trade at P/E of 6.7 and EV/EBITDA of 2.4 – well below their own history

Kumba Iron Ore's market capitalization is 78.3 billion rand. With trailing net profit of 11.6 billion rand, the shares trade at a P/E of 6.7 – below the three-year average of around 8-9.

EV/EBITDA is 2.4 – also well below the historical average. The low valuation reflects market pessimism about iron ore prices but creates potential for share price growth if prices stabilize.

According to the portal's model, the upside potential is minus 52% – the valuation already reflects the price decline

Our model, which reprices EBITDA at current commodity prices and applies a target EV/EBITDA multiple, shows that the fair value of the share is 52% below the current market price. This suggests that the market may not have fully priced in further declines in iron ore prices.

The portal's model is our own calculation, not a consensus forecast or target price. It assumes that at current ore prices and a target multiple of 2.4, the share is overvalued. However, the model is sensitive to commodity price forecasts: if prices recover, the gap will narrow.

Valuation on the latest reported figures

Bottom line

Kumba Iron Ore reported a sharp profit decline due to lower ore prices but maintained a healthy balance sheet with a net cash position and generates sufficient operating cash flow to sustain dividends. The shares trade at low multiples relative to their own history, offering upside potential if prices stabilize. However, our model indicates a 52% overvaluation, which makes us cautious. Verdict – neutral: the attractive dividend yield and low valuation are balanced by the risk of further commodity price declines.

On March 31, 2026, Pepkor released its results for the first half of fiscal 2026. Revenue grew 13.2% year on year, EBITDA 11.6%, and net profit 9.8%. However, EBITDA margin fell from 16.9% to 16.6%, and net margin from 6.3% to 6.1%. The shares trade at a P/E of 12.2 and EV/EBITDA of 4.5, which looks attractive relative to its own history, but margin pressure and modest free cash flow lead us to rate the stock as 'rather attractive'.

Key takeaways

— Pepkor's revenue for the first half grew 13.2%, but the pace slowed compared to the previous half-year

— EBITDA margin fell 0.3 p.p. to 16.6% due to higher operating expenses

— Net profit rose 9.8%, but net margin declined to 6.1%

— Leverage remains low: net debt/EBITDA for the trailing twelve months is 0.49

— Dividend yield of 2.7% is below the key rate, but payments are supported by a strong balance sheet

— On the portal's model, the upside potential of the shares is +11% from the current price

— Operating cash flow for the trailing twelve months was 4.5 billion ZAR, limiting room for dividend growth

Attractiveness

Key figures, ZAR bn

Pepkor's revenue for the first half grew 13.2%, but the pace slowed compared to the previous half-year

For the first half of fiscal 2026, Pepkor's revenue reached 101.7 billion ZAR (LTM), up 13.2% year on year. Growth continues, but the pace has slowed: in the second half of fiscal 2025, revenue grew faster than in the reporting period.

The main driver remains the retail network in South Africa and other African countries, where Pepkor continues to open new stores and expand its assortment. However, inflationary pressure on consumer demand and competition from online retailers may limit further acceleration.

EBITDA margin fell 0.3 p.p. to 16.6% due to higher operating expenses

EBITDA for the first half grew 11.6% year on year to 18.2 billion ZAR (LTM), but the margin declined from 16.9% to 16.6%. This means operating expenses grew faster than revenue, which is typical for a period of active network expansion.

The margin decline is not critical, but it indicates that the company cannot fully offset cost increases with price hikes. If the trend continues, it could pressure profitability in future periods.

Net profit rose 9.8%, but net margin declined to 6.1%

Net profit for the first half increased 9.8% year on year to 5.9 billion ZAR (LTM). However, net margin declined from 6.3% to 6.1%, reflecting higher interest expenses and tax burden.

Despite the slowdown in profit growth, absolute figures remain stable. The company continues to generate sufficient profit to service debt and pay dividends.

Leverage remains low: net debt/EBITDA for the trailing twelve months is 0.49

Pepkor's net debt at the latest reporting date was 8.9 billion ZAR, and the net debt/EBITDA ratio for the trailing twelve months is 0.49. This is a low level, giving the company significant financial flexibility.

Over the past twelve months, net debt increased by 3.3 billion ZAR, related to investments in network expansion and possible lease payments. Nevertheless, the debt level remains comfortable and does not restrict dividend payments.

Dividend yield of 2.7% is below the key rate, but payments are supported by a strong balance sheet

Over the trailing twelve months, Pepkor paid dividends providing a yield of 2.7% at the current price. This is below the key rate, making the shares less attractive for income-oriented investors.

However, payments are supported by low debt and stable profit. We expect the company to continue paying dividends this year, but the amount will depend on profit growth rates and investment needs.

On the portal's model, the upside potential of the shares is +11% from the current price

Our value creation model, based on EBITDA growth and target multiple, shows that Pepkor shares have an upside potential of +11% from the current price. This is a moderate upside, not exceptional, but confirms that the stock is not overvalued.

At the current P/E of 12.2 and EV/EBITDA of 4.5, the shares trade below their three-year averages, providing some margin of safety. However, the realization of potential will depend on the company's ability to maintain growth rates and stabilize margins.

Operating cash flow for the trailing twelve months was 4.5 billion ZAR, limiting room for dividend growth

Operating cash flow for the trailing twelve months was 4.5 billion ZAR, significantly below net profit for the same period. This is due to working capital growth and capital expenditures on network expansion.

Low operating cash flow means the company may be forced to limit dividend growth or attract debt financing for investments. This is an important factor for investors expecting higher payouts.

Valuation on the latest reported figures

Bottom line

Pepkor shows steady revenue and profit growth, but margin compression and weak operating cash flow raise questions. Leverage remains low, supporting dividend payments, though their yield is below the key rate. The shares trade at a discount to their own history, and the portal's model shows moderate upside of +11%. Verdict: 'rather attractive' — the stock is interesting for long-term investors but requires monitoring of margins and cash flow.

On 28 February 2026, Clicks Group released its results for the first half of fiscal 2026. Revenue rose 7.4% to ZAR 49,500 million, EBITDA increased 8.1% to ZAR 6,324.9 million, and net profit grew 6.6% to ZAR 3,331 million. At the current price, the shares look attractive thanks to a moderate valuation and a generous dividend backed by low debt.

Key takeaways

— Revenue +7.4% in H1 2026 – growth continues, but no acceleration

— EBITDA margin 13.1% – stability amid revenue growth

— Net profit +6.6% – slower than revenue due to stable margin

— Net debt ZAR 786.7 million – low level, but increased over the year

— Dividend yield 4.75% – attractive relative to the key rate

— Valuation: P/E 13.3 and EV/EBITDA 7.1 – below historical averages

— Portal's model implies +6% upside

Attractiveness

Key figures, ZAR bn

Revenue +7.4% in H1 2026 – growth continues, but no acceleration

For the first half of fiscal 2026, Clicks' revenue reached ZAR 49,500 million, up 7.4% year-on-year. This is moderate growth, showing no acceleration but also no slowdown – the company is steadily increasing sales.

The main driver remains the retail chain, which continues to expand and grow like-for-like sales. However, the report does not disclose segment details, so we cannot single out specific growth factors.

EBITDA margin 13.1% – stability amid revenue growth

EBITDA for H1 2026 rose 8.1% to ZAR 6,324.9 million, with margin at 13.1% versus 13.0% a year earlier. This indicates that the company maintains operational efficiency despite inflationary pressure and rising costs.

Stable margin is the result of cost control and economies of scale. However, we do not see significant improvement, which limits the potential for profit growth above the revenue pace.

Net profit +6.6% – slower than revenue due to stable margin

Net profit for H1 2026 reached ZAR 3,331 million, up 6.6% year-on-year. Profit growth lags revenue, explained by a stable net margin of 6.2% – the same as a year earlier.

The lack of margin improvement means operating leverage is not fully working. The company may be investing in growth, which holds back short-term profit but could pay off in the future.

Net debt ZAR 786.7 million – low level, but increased over the year

As of the latest balance sheet date, Clicks' net debt stood at ZAR 786.7 million. The net debt to EBITDA ratio for the trailing twelve months is 0.12, a very low level indicating significant financial strength.

Over the year, net debt increased by ZAR 0.8 billion (in RUB equivalent per facts), likely related to funding dividends and capital expenditures. Nevertheless, leverage remains minimal, and the company has a large safety margin.

Dividend yield 4.75% – attractive relative to the key rate

Over the trailing twelve months, Clicks paid dividends yielding 4.75% at the current price. This is significantly above South Africa's key rate, making the shares attractive for income-oriented investors.

We expect the company to continue paying dividends this year, based on stable profit and low debt. However, the payout will depend on company policy and potential one-off costs. If profit remains at the trailing twelve-month level, the dividend could be comparable to the previous one.

Valuation: P/E 13.3 and EV/EBITDA 7.1 – below historical averages

Current P/E based on trailing twelve-month profit is 13.3, and EV/EBITDA is 7.1. These multiples look moderate and are likely below their own three-year averages, indicating undervaluation relative to history.

Return on equity (ROE) of 47.2% is impressive and confirms business efficiency. Given these metrics, the valuation does not appear stretched, especially considering steady revenue and profit growth.

Portal's model implies +6% upside

According to the portal's model, based on EBITDA growth and a target multiple, the fair value of Clicks' shares is 6% above the current market capitalization. This is moderate upside, not implying significant re-rating.

Thus, the model confirms that shares trade close to fair value, but with a slight discount. The main appeal lies in dividend yield and business stability, not in expectations of strong capital appreciation.

Valuation on the latest reported figures

Bottom line

Clicks shows stable but not outstanding growth: revenue and profit are increasing at moderate rates, margins remain almost unchanged. The financial position is solid: net debt is minimal, and ROE is high. The dividend yield of 4.75% is the main argument for buying, especially given low leverage. The valuation is moderate, and the portal's model shows slight upside. Overall, the shares look attractive for conservative income-oriented investors, but do not promise significant capital appreciation.