Scancom PLC (MTN Ghana):  A high-performing yet undervalued stock on the GSE

MTN Ghana: A Leading Force in Telecommunications

MTN Ghana is the largest telecommunications provider in the country. It offers mobile, data, and financial services to millions of Ghanaians. Established in 1996, it has transformed Ghana’s digital landscape. The company has over 28.5 million mobile subscribers and 17.5 million active data users. Additionally, it boasts 17.2 million Mobile Money (MoMo) users.

Financially, MTN Ghana shows strong growth. In 2024, service revenue increased by 34.5% to GHS 17.9 billion. Profit after tax rose by 35.9%. The company rewards shareholders with attractive dividends, making it a top performer on the Ghana Stock Exchange.

MTN Ghana is committed to innovation and expansion. It aims to lead the digital revolution in West Africa by enhancing network infrastructure and promoting financial inclusion through MoMo.

Historical Dividend Performance

MTN Ghana has been a leading dividend-paying stock on the GSE since its IPO date.

| Year | Interim Dividend (GHS) | Final Dividend (GHS) | Total Dividend (GHS) | YoY Growth (%) |
|------|------------------------|----------------------|----------------------|-----------------|
| 2024 | 0.065 | 0.24 | 0.305 | 35.56% |
| 2023 | 0.05 | 0.175 | 0.225 | 41.94% |
| 2022 | 0.04 | 0.124 | 0.164 | 36.14% |
| 2021 | 0.03 | 0.083 | 0.113 | 32.08% |
| 2020 | 0.03 | 0.05 | 0.08 | - |
|2019                                                                                            |

The average annual dividend growth rate from 2019 to 2024 is 35 .49 %, showing consistent shareholder rewards.

Financial Performance & Growth Prospects

MTN Ghana's financial results for 2024 indicate strong growth:

- Mobile Subscribers: Increased by 6 .5 % to 28 .5 million
- Active Data Subscribers: Increased by 13 .7 % to 17 .5 million
- Active Mobile Money Users: Increased by 12 .8 % to 17 .2 million
- Service Revenue: Increased by 34 .5 % to GHS17 .9 billion
- EBITDA: Increased by 31 .3 % to GHS10 .2 billion
- Profit Before Tax: Increased by 35 .9 % to GHS7 .6 billion
- Total Capex: GHS4 .4 billion
- Direct & Indirect Taxes Paid: GHS8 .6 billion

These figures highlight MTN Ghana’s ability for consistent revenue and profit growth.

Stock Price & Valuation

Despite solid performance, MTN Ghana's stock trades around GHS3 .20 per share now, significantly below its fair value based on earnings growth and dividends.

Future Share Price Projections

At the start of *2025*, MTN shares are at *GHS2*.*50*. Assuming a *50%* average annual growth rate, projected prices are:

- *2025*: *3.*75*
- *2026*: *5.*63*
- *2027*: *8.*44*

If MTN continues its current trajectory, the stock price could double within five years.

Future Dividend Projections

With a historical dividend growth rate of *35.*49%*, projected dividends are:

- *2025*: *0.*366*
- *2026*: *0.*44*
- *2027*: *0.*528*

Investors can expect increasing payouts for capital gains and income generation.

Key Findings and Future Projections for MTN Ghana Shares

MTN's dividends have consistently grown over the years with an average increase of *38*.*49%* from *2019* to *2024*. The most recent payout in *2024* totaled *GHS* *0.*305*, reflecting a *35*.*56%* increase from *2023*.

Projected dividends for the next three years assume a *20%* annual growth rate.

Investment Outlook: Why MTN Ghana is a Strong Buy

1) Consistent Revenue Growth:
- High revenue growth driven by mobile and MoMo subscribers.

2) Attractive Dividend Yield:
- One of the best yields on the GSE for income-focused investors.

3) Undervalued Stock Price:
- Trading at GHS3 .*20*, expected slight drop post-record date.

4) Market Leadership:
- Nearly *70% market share* in Ghana’s telecom industry.

5) Resilient Business Model:
- Continues solid strategy despite inflation and currency volatility challenges.

Conclusion

MTN Ghana remains one of the best-performing stocks on the GSE but is undervalued currently with strong financials and consistent dividend growth potential.

Long-term investors should consider accumulating shares now for future gains and income generation opportunities.

Pension fund managers should add MTN shares to their portfolios due to consistent payments and strong market position.

Investors should assess portfolio suitability before investing in MTN stock based on their objectives or consult professional advisors like EcoCapital Investment Management Limited for guidance on risk tolerance strategies.