The company added that the dividend returns are expected to range between 3.6% and 4.6%.
Al-Rajhi Capital assured that Saudi Aramco provides more stability in its production growth in the long run, in addition to its stable cash costs.
“Al-Rajhi Capital” determined the fair price of Aramco’s share at 37.5 riyals, almost 8 to 9% above the current market price.
In this context, the head of research at Al-Rajhi Capital, Mazen Al-Sudairy, confirmed in an interview with “Al-Arabiya” that “Aramco” has the permanent ability to maintain high dividends regardless of oil prices, as in his estimates even if the price of Brent falls to $ 40 and when The price of West Texas crude is 35 dollars, Aramco can achieve dividends to its owners about 63 billion dollars, even after paying the concession fees and operating costs.
In his view, the highly anticipated distributions of $ 80 billion for 2020 will not weaken Aramco’s investment spending.
Aramco announced its intention to distribute its owners a profit of $ 75 billion in 2020. Aramco’s planned distributions in 2020 represent an increase of more than 29% over the 2018 dividend.
Al-Rajhi Capital indicated that Aramco gives more stability in production growth operations, given that its proven reserves are equivalent to 10.6 times compared to its counterparts from other companies.
She explained that her forecast for distributions in 2020 came based on her expectation that the company would sell 10.3 million barrels per day of crude oil and condensate, the price of a barrel of oil at $ 61.3 per barrel, 4 million barrels per day in net refining capacity, and 22.7 million metric tons in net chemical capacity (excluding a company SABIC.
Al-Rajhi Capital expected Aramco’s sales in 2020 to reach 1.276 trillion riyals, compared to 1.216 trillion riyals in revenue the company is expected to achieve during the past year.
And it expected that the company’s profits at the end of this year will reach 401 billion riyals, compared to 361 billion riyals during the past year. It is noteworthy that global investment banks evaluate Aramco’s share at more than 15% of the offering price, amid optimism that Aramco will raise the proposed dividends for the current year to $ 75 billion.
GB Morgan valued Aramco at 37 riyals and recommended an increase in its weight in the portfolios. HSBC set the target price of 36.8 riyals and Goldman Sachs set the highest share price target so far at 41 riyals.