The JSE Ltd, operator of our local bourse and other markets, had a brisk 2024 with net profits of R918m, well up from 2023’s R774m.
Not long ago, the JSE was disparaged as a “no or low growth stock”, with its earnings multiple and dividend yield sitting in the high single digits. There was even a snide likening of the JSE to British American Tobacco — the former seeing a decline in new listings activity and the latter in cigarette sales.
The JSE, one might argue, has been more convincing in finding new growth streams outside what might be considered its core business. The share price seems to agree, having shifted close to 45% over a year. The latest results show “nontrading income” has risen 7.5% to R1.17bn, making up 37.8% of operating income (up from 36.8% last year).
The JSE’s current earnings multiple of 12 suggests the market is expecting some short-term and medium-term growth — which is unsurprising, considering the chances of severe market volatility, thanks to geopolitical tensions.
But let’s not overlook the JSE’s dividend attributes, thanks to its dependable cash flows. In the past three financial years, nearly R24 a share has been returned to shareholders — which is astounding, considering the JSE share price dipped under R84 in April last year. Since 2018, the JSE has returned — by the FM’s calculations — collective payouts of R56.40 a share (with special dividends pencilled in).
Stockbrokers who held onto their shares after the JSE demutualised 20 years ago must be very happy campers.
