Dividends recover for Saudi Arabia’s 10 biggest companies after pandemic: year in review

RIYAD: The past twelve months have seen a period of resumption in dividends that listed companies in Saudi Arabia have paid out to investors, as the economy gained ground following the COVID-19 outbreak in March 2020.

It remains to be seen how the omicron variant will weigh on the rebound activity seen earlier this year after the vaccination rollout and the easing of lockdown restrictions.

The top 10 players on the Saudi stock exchange have paid stable to higher dividends in 2021, attracting investors who want reliable income amid the global uncertainties caused by the pandemic.

HIGHLIGHTS

• The 10 largest companies are made up of four energy and materials giants, four banks, a utility provider and a telecommunications company, which operate relatively stable and have a collective market capitalization which exceeds $ 2 trillion.

• The Kingdom’s oil giant, Aramco, dominates the exchange, compromising more than SR7 trillion ($ 1.86 trillion) in market value. Aramco’s dividend payout remained unchanged from the previous year and paid each shareholder SR 1.05 per share for the first nine months of 2021. This brought the dividend yield to almost 4% on a share price of 35 SR.

Fueled by the rebound in crude prices, the oil giant’s net profit has more than doubled in the first nine months compared to the same period a year ago, reaching up to SR 279 billion.

Chemical maker Saudi Basic Industries Corp., known as SABIC, worth over SR 341 billion, said it would pay SR 6.75 billion – SR 2.25 per share – as a dividend to shareholders in the second half of 2021.

The industrial company’s recommendation brings the annual dividend per share to SR4, from SR3 in 2020. The rise follows strong financial results for the first nine months of 2021, which saw SABIC reach a profit of $ 18.1 billion. SR versus an SR2. 6 billion in losses a year ago, mainly due to income from joint ventures.

The Kingdom’s banking leaders – Al Rajhi Bank, Saudi National Bank, Riyad Bank and Saudi British Bank – have all declared higher dividend payouts during the year to date.

Al Rajhi Bank, one of the 15 largest banks in the world by market value, paid SR 3.5 billion – or SR 1.4 per share – in dividend for the first half of 2021, compared to only SR 1 per share for the whole of 2020 this came as it announced a 44% increase in its net profits to SR 10.73 billion for the nine months through September 30, 2021.

Saudi Arabia’s second-largest bank, Saudi National Bank, distributed SR 0.65 per share for the first half of this year. This compares to a net annual dividend per share of SR 0.8 for all of 2020, which means its semi-annual payment increased 62.5% year-on-year.

Saudi Telecom Co., or stc, paid quarterly dividends totaling SR3 per share for the first three quarters of 2021, matching the rate last year. This resulted in a dividend yield of 3.6 percent on a share price of 110.8 SR.

Six-year data reported by the telecom operator revealed a stable trend in terms of annual net dividend per share, fluctuating between SR4 and SR6 since 2016.

Since 2005, Saudi Electricity Co. has provided a safe haven for dividends to shareholders, offering regular annual payments of SR 0.7 per share, even amid high volatility. In 2021, the dividend yield was 3% on a share price of 110 SR.

The Gulf’s largest mining company, Arabian Mining Co., known as Ma’aden, has withheld dividends to finance its growth since its listing in 2008. The company reported a profit of SR 3.14 billion in the year. in the first nine months of this year, dropping from a net loss of SR 781 million over the period last year.

The eighth largest listed company in the Kingdom SABIC Agri-Nutrients, sold 2.5% on a share price of SR172, and offered its highest dividend policy since 2015 this year. The petrochemical company’s payout jumped 113% year-on-year to SR 4.25 per share.

Despite moderate dividend yields, most of these large companies have enjoyed a long track record of steady growth and regular payments – a good bet for risk-averse investors.


Source link