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5 Best Shares for Beginners on the JSE

Updated 15 Aug 2022
5 Best Shares for Beginners on the JSE

The 5 Best Shares for Beginners revealed. We have carried out extensive research to identify the ideal shares for beginners, listed on the JSE.

This is a complete guide to the 5 Best Shares for Beginners on the JSE

In this in-depth guide you’ll learn:

  • How to choose shares as a beginner investor or trader
  • 5 Best Shares for Beginners on the JSE
  • How to choose the Right Share Broker in South Africa
  • The Best Share Brokers in South Africa

And lots more…

So, if you’re ready to go “all in” with the 5 Best Shares for Beginners on the JSE…

Let’s dive right in…

How to choose shares as a beginner investor or trader

There is no fool-proof way for beginners to choose the right shares. Several factors must be considered, including the outcome that investors are trying to achieve, their risk tolerance, and the time, and capital that they can use to invest.

To choose the most suitable stocks, investors must carry out extensive research and analysis, use several metrics, avoid emotions, and diversify their investment portfolio to minimize the risk of loss.

shares for beginners South Africa

5 Best Shares for Beginners on the JSE

Omnia Holdings Limited (JSE: ON)

Omnia is a diverse group that works in the fields of agricultural, mining, and chemical applications via R&D, manufacturing, and supplying chemicals and specialized services and solutions.

Omnia differentiates itself by providing its clients with value across the supply and service chain via the use of innovative ideas and intellectual capital.

In terms of market capitalization, Omnia Holdings Ltd is now the 105th most valuable stock on the JSE, with a value of ZAR 11.8 billion (or around 0.059% of the equities market on the Johannesburg Stock Exchange).

After opening the year at 64.01 ZAR a share, Omnia’s stock has gained 9.23%, placing it at the 76th spot on the JSE’s year-to-date performance rankings.

Growth, Valuation, Trading Information
Price 69.92 ZAR
Market Capitalization 11.8 billion ZAR
Shares Outstanding 169 million
52-week range 49.70 – 87.75 ZAR
Earnings Per Share 6.72 ZAR
P/E Ratio 10.40
Dividend Yield 4.02%
Gross Turnover 32.5 million ZAR
Return on Equity 13.51%
Return on Assets 9.41%

Industrials REIT Ltd (JSE: MLI)

share trading beginner

Located in both the Specialist Fund Segment of the Main Market of the London Stock Exchange and the Johannesburg Stock Exchange, Industrials REIT is a property investment firm (LSE). The UK, Germany, and Switzerland are home to Industrials REIT’s holdings.

Industrials REIT, which specializes in Multi-Let Industrials, offers adaptable space that is appealing to a wide variety of tenants at a reasonable price and has the potential to provide a stable and increasing stream of revenue.

With a market worth of ZAR 9.71 billion (or around 0.049% of the Johannesburg Company Exchange equity market), Industrials REIT Ltd is the 120th most valuable stock on the JSE currently.

Growth, Valuation, Trading Information
Price 33.20 ZAR
Market Capitalization 9.72 billion ZAR
Shares Outstanding 292 million
52-week range 28.50 – 44.89 ZAR
Earnings Per Share 1.43 ZAR
P/E Ratio 21.67
Dividend Yield 4.46%
Gross Turnover 8.53 million ZAR
Return on Equity 20.59%
Return on Assets 4.58%

Kumba Iron Ore Ltd (JSE: KIO)

Anglo American plc subsidiary Kumba Iron Ore Ltd. is a market leader in providing high-quality iron ore to the world’s steel industry by adding significant value to the material.

In South Africa, Kumba operates the Sishen and Kolomela mines in the Northern Cape Province to extract iron ore. Kumba sells its iron ore to clients in a wide variety of countries, including but not limited to China, Japan, Korea, and other European and Middle Eastern nations.

With a current market value of ZAR 148 billion or around 0.738% of the equities market on the Johannesburg Firm Exchange, Kumba Iron Ore Ltd is the 20th most valuable stock currently.

Growth, Valuation, Trading Information
Price 458.25 ZAR
Market Capitalization 148 billion ZAR
Shares Outstanding 322 million
52-week range 385.49 – 803.38 ZAR
Earnings Per Share 103.65 ZAR
P/E Ratio 4.42
Dividend Yield 22.5%
Gross Turnover 157 million ZAR
Return on Equity 74.68%
Return on Assets 73.28%

Karooooo Ltd (JSE: KRO)

Over 1.3 million connected cars use Karooooo Limited’s real-time data analytics solutions for smart transportation. Karooooo is a worldwide mobility software-as-a-service (SaaS) platform that optimizes the value of automotive and workflow data.

Karooooo, headquartered in Singapore, is the sole owner of Cartrack, a software as a service (SaaS) platform that helps businesses and organizations optimize their operations by enhancing productivity, cutting costs, boosting security, and tracking the environment, ensuring regulatory compliance, and mitigating risk.

best stocks for beginners JSE

Since January 2021, Cartrack has recorded over a million members in 23 countries across five continents. With a current market value of ZAR 11.5 billion, the 110th most valuable stock on the JSE is Karooooo Ltd.

This represents around 0.057% of the equities market on the Johannesburg Stock Exchange.

Growth, Valuation, Trading Information
Price 369.99 ZAR
Market Capitalization 11.17 billion ZAR
Shares Outstanding 31 million
52-week range 320.01 – 620.00 ZAR
Earnings Per Share 15.21 ZAR
P/E Ratio 24.33
Dividend Yield 2.59%
Gross Turnover 4.42 million ZAR
Return on Equity 21.92%
Return on Assets 24.52%

BID Corporation Ltd (JSE: BID)

For those who are interested, Bid Corporation Ltd. (Bidcorp) is a global, multi-brand foodservice provider that operates everywhere save in Antarctica and North America. To put it simply, Bid Corp Ltd is a wholesaler of edible goods.

The business provides cold and frozen food, fresh vegetables, meats, and non-food items to businesses all around the world.

Its current market value of ZAR 106 billion places BID Corporation Ltd as the 32nd most valuable stock on the JSE, or around 0.528% of the equities market on the Johannesburg Stock Exchange.

Growth, Valuation, Trading Information
Price 314.83 ZAR
Market Capitalization 107 billion ZAR
Shares Outstanding 335 million
52-week range 271.18 – 360.98 ZAR
Earnings Per Share 11.55 ZAR
P/E Ratio 27.25
Dividend Yield 2.22%
Gross Turnover 159 million ZAR
Return on Equity 14.27%
Return on Assets 10.26%

How to choose the Right Share Broker in South Africa

shares south africa beginner

South African traders could not have picked a more favourable time to enter the investment market than the present. Competition among online brokers is high, which means costs are dropping down and features are being boosted.

Those interested in trading global financial instruments could choose from a wide variety of online forex and CFD brokers. However, there are several factors to consider when choosing a broker and we will go through them here.

Commission Charges

Individual stocks, options, mutual funds, exchange-traded funds, and bonds are the main investment types offered by brokers. Some will also provide exposure to the forex market, futures trading, and cryptocurrency exchanges.

Both the suitability of the broker’s offerings to your investment requirements and the fees you must pay is dependent on the investments the broker has available. You should pay close attention to the commissions that are involved with the investments you like.

Overall Reliability

There is a diverse selection of brokers available. Several have been popular for many years, while others have just recently emerged.

That does not imply they cannot be trusted, but if they are managing transactions for clients, they are members of a self-regulatory organization like the Financial Conduct Authority (FCA), the Financial Sector Conduct Authority (FSCA) and other regulators, or subject to additional oversight.

Account Fees

While it could be impossible to eliminate account fees, they may be kept to a minimum. To withdraw funds or investments, or to close your account, most brokers will assess a fee. When switching brokers, your new firm could pay some or all your transfer expenses.

If a broker does not charge them, or if you do not use their optional services, you could avoid paying most additional costs.

Annual costs, inactivity fees, trading platform subscriptions, and additional charges for research or data are all examples of the kind of expenses you should be aware of.

Pricing and Execution on Trades

Cost is less of a factor today, leading to commission-free transactions becoming the norm at most brokerages.

However, you should consider the brokerage’s position on the controversial practice of paying for order flow and how much it costs before making a final decision.

This is especially true if you are an active trader who wants their deal completed at the best price possible, even if it means a difference of a few cents.

Additional Tools, Educational Materials, and Features

Look for a brokerage that provides free educational tools like live webinars, detailed how-to instructions, video tutorials, glossaries, and more if you are just starting in the investment world.

You should also look at the broker’s commitment to educating its customers about the inherent hazards of more complex trading tactics like options.

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Conclusion

While the research involved with choosing the right shares can seem intimidating, there are some key metrics that beginners can check to identify suitable investment options on the JSE.

We have provided some of these shares and their metrics, giving beginners a starting point to building a diversified investment portfolio.

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