Almost every day we go to various shops or shopping centers. Curiously enough, we do not even think about the fact that we can also make money from these shops and not only spend it there. Shares of many large retailers are traded on the stock exchange. It means you can make a profit from them. It is not even necessary to buy stocks.
Speculators are prone to invest in stable and successful companies, including the public joint stock company - Magnit. Outlets of this retailer are located even in the most remote corners of Russia. About 12 million people do their shopping in Magnet shops a year. The company holds leadership in terms of the number of stores and geographical coverage.
It is quite impressive, isn’t it? In this article, we will discuss who founded Magnit, how much the company's shares are worth and how the owners keep their lucrative business running.
History
Magnit was founded in Krasnodar in 1994 by Russian entrepreneur Sergey Galitsky as a wholesale company of household chemicals called Thunder. The brand name - Magnit was later coined by one of the company's employees.
Throughout its history, Magnit has evolved from a small regional company to a leading Russian retail chain. In the first years of its operation, Magnit entered the top ten largest Russian distributors of cosmetics, household chemicals, and perfumes thanks to the active development of a network of wholesale stores. A bit later, it opened food stores. Aside from commodity sales, it operates a private-label food production business. Magnit owns greenhouse and mushroom complexes. It also manages several plants for growing vegetables and the production of dried food and confectionery. The network of retail outlets includes shops within walking distance, supermarkets, pharmacies, and discounters.
Main achievements in 2016-2020:
- The number of receipts increased from 3.8 to 4.6 million per year.
- The retail area of the stores rose to 7,500 square meters from 5,100.
- The number of towns/cities where Magnit operates grew to 3,800 from 2,500.
A subsidiary of Magnit is the Magnit Cosmetics chain, the leader in revenue growth among retail perfume and cosmetics stores in 2020.
The chain stores operate in large cities and in small towns. The company’s logistics infrastructure includes 45 distribution centers and more than 5,000 trucks. Magnit is the largest private employer in Russia.
Magnit’s striking results
- 22,344 stores
- 307,656 employees
- 39 distribution centers
- 17 production facilities.
The company is constantly looking for new ways to expand its presence in the market. It also invests in the development and promotion of social projects. Last year, the company began a partnership with P&G to create the largest network of BottleBanks in Russia and launched new social and online delivery projects. It also created its own payment service - Magnit Pay and opened the first thematic superstores.
Where to buy its shares
Founder Sergey Galitsky owned and ran the company until 2018 when VTB Banking Group became the main shareholder of Magnit. In 2021, the largest stake was bought out by Marathon Group, which owns shares in KFC, the Demeter Holding company.
Magnit's IPO on the Moscow Stock Exchange took place in 2006. Back then it was estimated at 608 rubles. Now, the share price (MGNT) is about 5,800 rubles.
What impacted share price:
- In 2008, the stock price was affected by the economic crisis. It fell almost twice.
- In 2015, the quotes reached a high of 11,600 rubles thanks to competent management and anti-crisis measures.
- In 2018, the shares began to get cheaper because of the decisions of a new owner and operating difficulties. The share price decreased to 3,000-4,000 rubles.
Find out the latest news in financial markets in the Forex Analysis Articles section on the InstaForex website.
Despite the mixed dynamics of quotes, Magnit stock has always been in high demand amid the stable financial performance of the company. The company's turnover in 2020 amounted to 1.55 trillion rubles and climbed by 13.5% compared to 2019. Since 2016, its revenue has soared almost one and a half times.
In July-September 2021, the company's total revenue came in at 483.9 billion rubles, adding 28% over the year.
How to make profit on Magnit shares
If you want to obtain Magnit shares, you need to register an account with a broker. Private investors do not have access to the exchange.
Dividends, the profit that the company distributes among shareholders, can be one of the ways to get income from shares .
Magnit has been paying dividends since 2008. At various time periods, payments ranged from 1.46 to 490.62 rubles per share. The dividend yield was 0.3-8.7%.
In the autumn of 2021, the company's board of directors intended to allocate about 30 billion rubles for the payment of dividends for the first 9 months, which would amount to 294.37 rubles per ordinary share.
Magnit dividends for last five years:
- 2020: 50 billion rubles.
- 2019: 31billion rubles.
- 2018: 31 billion rubles.
- 2017: 25 billion rubles.
- 2016: 26 billion rubles.
If you are not planning to buy shares, you can get a profit by trading them. In this case, you can receive income from price fluctuations.
The main advantage of CFDs is that they allow investors to trade with leverage and open both long and short positions. Traders earn on rises and declines in the stock price. If this option suits you, you can open an account with a CFD broker and start trading. It will take just several minutes to register an account with InstaForex. A few clicks and you can start earning. The Forex Calculator developed by InstaForex will help you calculate your income.
To make your trading more comfortable, use the popular MT4 platform by InstaForex.
Conclusion
Nowadays, the main goal of Magnit is to expand the business and maintain its profitability. It plans to continue investing in e-commerce, focusing on customers, employees, and an effective trading platform.
The key strategies of Magnit for the future are to reduce its ecological footprint and become the top employer in the industry. It also strives to have the best corporate governance and make positive changes for citizens.
If all of the above facts have convinced you to buy Magnit shares, go to the InstaForex website and register a trading account.
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