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Exxaro vs Kumba

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Not applicable
Which is better? My money, currently is on EXX. There is a lot more upside potential in coal and mineral sands than there is in iron ore, I think. Both stand to benefit from a rand depreciation, and Exxaro stands to benefit from any additional KIO profits - given it has a stake. So, while KIO's dividends look more attractive, it is also quite heavily priced. Consensus forecasts puts its HEPS at 2400, which even at a low PE of 8 puts its price at 17000. So I think EXX is the winner.
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11 REPLIES 11
gareth01
Regular Contributor
Both quality companies with great fundamental demand for each of its product usage. But I agree, I would prefer EXX as well if I was forced to choose one. Also I believe there to be some acquistions in the pipeline for EXX soon (just my opinion), especially on broadening their product offering to include more renewable energy type offerings.
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striker
Super Contributor
- Skaap - sorry can't agree that KIO is expensive - Of the heavyweights, not only lowest P/E but highest D/Y . Not saying I dont like EXX - but prefer KIO.
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Plonky
Super Contributor
I have held both in my portfolio for more than 6 months now. Exx has given me a 40% return while Kumba has given me a 22% return. Even with Kumba's higher dividend yield, Exxaro has given a better return.
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prancing_horse
Super Contributor
Both quality stocks,bought KIO (cfd's) just as it went ex div which coincided with the Japanese disaster and sold 3 weeks later, my best deal of the year so far, at the same time bought EXX (ssf's) which with hindsight should have ofloaded (greed),will hold out for 17400 before futures closeout.I intend adding both to my long term portfolio beginning of June when I receive my company dividends.
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striker
Super Contributor
- Head to head comparison ; KIO 1 year - Up 40% EXX 1year - up 56% 3 years - up 36% 3 years- up 22% 5 years - up 303% 5 years- up 248%
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Not applicable
Boet, care to enlighten us on the implications and relevance of this informative statistic you have just supplied us?
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THRESHOLD
Super Contributor
EXXARO - KIO INTEREST +_ {20/74 X (R450X322MIL)}/358MIL = R109. THEREFORE THE BALANCE IS WORTH 358MIL X (R168-R109 X 0.8)=R29 BILLION FOR THE BALANCE OF EXXARO'S INTERESTS. (TYPICALLY SAY A 20% DISCOUNT THE KUMBA INTEREST DUE TO THE INVESTMENT NATURE IN EXXARO'S HANDS AND THEN THERE' THE STEEP DISCOUNT ON THE DIVIDEND YIELD) EXXARO HAS 1,5 MILLION EXPORT QUOTA AT RICHARDS BAY (RISES TO 3,5 IN THE NEXT PHASE) For my money neither of them looks cheap. ARM, ANGLO, BILLITON, OPTIMUM (8,44 MILLION TON EXPORT QUOTA WITH R6 BIL MARKET CAP) would appear to be much cheaper bets going forward.
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striker
Super Contributor
- Well skaap if past price performance does'nt interest you, just ignore my posting.
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striker
Super Contributor
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Not applicable
My point being that those figures you quoted are basically neck on neck - so meaningless, when taking the original question into account
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striker
Super Contributor
- Well on 5yr. view Kio price out performed exx by 22% - 3 yrs - out-performed by 65%- hardly neck and neck . Looking forward , who knows - anybody's guess.
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