Is Choppies good for investment?

The red flags and green flags of Choppies Enterprise Limited

Author

Boago Sephutho
May 15, 2025

Table of Contents

Good morning! Let’s get into today’s article;

Is Choppies a good investment for now and the future, let’s find out how Choppies Enterprise Limited works:

Everyone shops at Choppies—but would you invest in it?

With Botswana’s growing interest in building wealth through the stock market, it’s important to look past the brand and deep into the numbers. So today, we’re breaking down Choppies Enterprises Limited’s Risk Checks, and what they really mean for you as a young investor, entrepreneur, or professional.

The Red Flags: Risk Areas to Watch

Red Flag Japan GIF by MotoGP™

Gif by motogp on Giphy

  1. Debt Coverage Concerns
    Interest payments aren’t well covered by earnings. This is a red flag—it means the company may be relying heavily on borrowed money to stay afloat.

  2. Declining Profit Margins
    Margins dropped from 2.6% to 1.8%. That means they’re making less money on every pula in sales—a big concern for profitability.

  3. Low Market Cap
    A BWP 995 million market cap is considered too low to compete with industry giants, making the stock more volatile and less attractive to institutional investors.

  4. Unstable Dividends
    If you’re looking for consistent passive income—Choppies might not be your go-to. The dividend track record has been shaky.

The Strengths: What Choppies Is Doing Right

  1. Strong Revenue Performance
    With BWP 9 billion in revenue, Choppies is clearly a high-volume retailer with real sales.

  2. Positive Equity & No Shareholder Dilution
    With BWP 59.3 million in shareholder equity and no dilution in the past year, investor value has been protected.

  3. Solid Growth Outlook
    Choppies’ earnings have grown 11.2% per year over the last 5 years, with good future profitability forecasts.

  4. Stable Share Price
    The share price has been steady over the last 3 months, showing good liquidity and confidence in the market.

  5. No Recent Negative Events
    No concerning events were flagged, and at least 3 years of financial data is available, which supports transparency.

How It Affects You

  • Young Professionals:
    Choppies’ high revenue and steady growth make it worth monitoring—but the weak profit margins and dividend inconsistency mean it may not suit those seeking short-term gains.

  • Entrepreneurs:
    Learn from their scale but avoid the mistake of sacrificing profit margins for volume. Financial health matters more than just sales.

  • Student Investors:
    This is a great case study in balancing growth with financial risk. Watch closely, but don’t invest until you understand your own tolerance for volatility.

The Bottom Line: Worth It or Walk Away?

Choppies is a high-revenue, low-margin stock with both potential and risk. If you’re looking for long-term capital growth with patience, it’s one to study and possibly invest in cautiously. But if you’re chasing stable dividends or rapid short-term returns, it might be best to look elsewhere.

Source: simplywallst