EVALUATION OF SHARI'AH STOCKS INTEGRATING TOTAL RETURN AND MARGIN OF SAFETY: EVIDENCE FROM THE JAKARTA ISLAMIC INDEX 2020–2025

Ismiatul Khairiyah

doi:10.32806/currency.v5i1.2577

Authors

Ismiatul Khairiyah STEI Masyarakat Madani Pamekasan

DOI:

https://doi.org/10.32806/currency.v5i1.2577

Keywords:

Total Return; Margin of Safety; Value Investing; Income Investing; Shari'ah Stocks; Jakarta Islamic Index.

Abstract

This research is motivated by the development of the Islamic capital market in Indonesia and investors' need for investment evaluation methods that measure not only the level of return but also the level of investment safety. Most previous studies tend to analyze Islamic stock returns and stock valuations separately, thus failing to provide a comprehensive overview of investment quality. This study aims to analyze the level of investment return through Total Return, the level of investment safety through Margin of Safety (MOS), and the relationship between these two indicators in high-dividend Shari'ah stocks included in the Jakarta Islamic Index (JII) for the 2020–2025 period. The study employs a quantitative approach with a descriptive-comparative design and Spearman correlation analysis on 11 stocks that met the sampling criteria. Total Return is calculated based on capital gains and dividend yields, while the Margin of Safety is determined through intrinsic value estimation using the Graham Number method. The results indicate that ADRO generated the highest Total Return at 229.43%, while INDF had the highest Margin of Safety at 56.37%. The analysis also identified six undervalued stocks and five overvalued stocks. The Spearman correlation test yielded a coefficient of 0.627 with a significance value of 0.039, indicating a positive and significant relationship between Total Return and Margin of Safety. These findings confirm that integrating income investing and value investing approaches can provide a more comprehensive evaluation of Islamic stock investments for investors.

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