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BUYING COMPANY STOCKS/SHARES

by | Jul 22, 2020 | business management, registration | 0 comments

YOUNG TREPs East Africa’s No.1 Business Management and Consultancy firm that helps people start and grow profitable businesses.

Very many people have started picking interest in how buying shares in companies works. It’s one of the best sources of passive income. In the developed and financially literate world many people invest alot of their money in stocks and earn with little or no effort long term. It’s most people’s retirement plan..that money most use to travel and explore the world.

In America 60% of the citizens own stocks.Today we shall use this opportunity to learn about stocks as UMEME floats it’s shares for sale to see how this works.

UMEME declared a UGX 35 dividend per share up for grabs.Book closure date was extended to 28th July so this gives an opportunity to existing and potential investors to buy stock and benefit on the 16% dividend yield (but this should be done by Thursday 22/07/2020). So you can actually buy stock now and sell it after 28th July if you so wish.

UMEME basic analysis using last year’s profits as an example.

If you invest UGX 20 Million for example now – this will be equivalent to 81,632 shares at the current UGX 245 shs market price per share.With the current dividend per share declared (for last year’s performance) of UGX 35, your dividend income would be, 81,632 shares * 35 which is UGX 2,857,142.

This doesn’t include “capital gains” once you decide to sell off your shares, possibly, right after you’ve earned your dividend income (after 28th July) – which may also be quite good depending on the UMEME performance, macroeconomic fundamentals, etc.
Ofcourse you’ll say investing 20M to earn 2.8M is small money but don’t forget UMEME is a big business that doesn’t need your money that much so they’re stock/share is costly and only those who invested in it at the start are taking home a kill..When you come in late when things are settled and the risk is minimal you don’t get rewarded like those who took the risk when everything was up in the air. Investing 20M is a start up and 20M 10 years later when it’s succesful reward differently.

Buy into a stable business

If you are the kind with a low risk appetite you can buy into stable businesses like UMEME,Banks,Insurance companies with no risk but with low returns or invest into start ups like CAMPUS DOCTOR and get bigger stake so that when they make it like UMEME your pay cheque will be one hundred times bigger for the same amount.

The higher the risk the bigger the reward. But all in all stocks is one of biggest financial bets there is… Some people invest in multiple start ups like 10 and 2 will work out crazily to cover up for the other 8 that didn’t. Imagine like Mbiire you had invested in MTN 20 years ago!?

Jaluum Herberts Luwizza is a Speaker,Writer, Columnist with the C.E.O Magazine and Contributor with the Nile Post.He is also a Business Consultant with YOUNG TREP East Africa’s No.1 Business Management and Consultancy firm that helps people start and grow profitable businesses.
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