Saudi Aramco is listed on the Saudi Stock Exchange (Tadāwul) under the ticker symbol 2222. The Saudi Aramco IPO came about in 2019, raising $25.6 billion through the sale of three billion shares. However, this was just 1.5% of the company’s value.
By limiting ownership of Aramco, Saudi Arabia is able to stay in control of the company. The company also exercised its “greenshoe option” to sell a further 450 million shares, raising the size of its IPO to a record $29.4 billion.
Saudi Aramco Shares Today (2222.SR)
Saudi Aramco, officially known as the Saudi Arabian Oil Company, is the largest oil company in the world by revenue and one of the most profitable companies globally. Headquartered in Dhahran, Saudi Arabia, Aramco was founded in 1933 and has since grown into an energy giant that plays a pivotal role in the global oil and gas industry. The mainly state-owned company operates across the entire hydrocarbon value chain, from exploration and production to refining, distribution, and petrochemicals.
In recent years, Aramco has been making investments in renewable energy as part of Saudi Arabia’s Vision 2030, which aims to diversify the country’s economy and reduce its dependency on oil.
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Oil and Energy Industry Comparison
Saudi Aramco EPS and Revenue Breakdown 2020-2023
| Year | EPS | Annual Revenue |
|---|---|---|
| 2020 | $0.20 | $229.97 billion |
| 2021 | $0.43 | $400.75 billion |
| 2022 | $0.65 | $604.17 billion |
| 2023 | $0.55 | $495.35 billion |
Saudi Aramco Price & Dividend Yield
When Saudi Aramco went public in December 2019, its shares were priced at SAR 32. After an initial dip, the stock generally performed well, supported by strong oil prices and high dividends.
Dividend Yield: 6.97%
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Saudi Aramco Share Price Forecast
According to data compiled by TradingView, out of 12 analysts covering Saudi Aramco, five have given the stock a Buy rating, six have a Hold rating, and one analyst has issued Saudi Aramco a Sell rating.
A View From The Bulls: According to an AGBI article in August, analysts believe the poor performance in Saudi Aramco shares this year is masking a bullish outlook for the company compared to international competitors. Ahmed Hazem Maher, an equity research director at financial services firm EFG Hermes, told the publication that “Aramco is a strong company with solid cash flows and can increase production levels as crude demand improves.” He added that the recent stock decline has more to do with a correction in global equities than anything related to Aramco.
A View From The Bears: Some analysts have raised concerns about the volatility in global oil demand and prices, which could impact Saudi Aramco’s revenue and profitability in the near term. Director of investment strategy and research at Kuwait’s Kamco Invest, Junaid Ansari, told AGBI that Aramco’s stock decline reflects Saudi Arabia’s commitment to cut oil production as part of an Opec+ agreement. He stated: “Pressure on refining and chemical margins have also affected (Aramco’s) profits.”
Average Analyst Consensus 12-Month Price Target: SAR 32.50
Our View: Saudi Aramco remains a dominant player in the global energy market and will benefit when oil prices are strong and decline when they weaken. Despite the recent dip, in the long term, it should remain strong.
The company’s ability to generate massive free cash flow makes it a reliable dividend payer, which should appeal to income-focused investors. However, investors must also weigh potential risks, including geopolitical factors, oil price volatility, and the ongoing global shift toward renewable energy.
Who Should Buy Saudi Aramco Shares?
Saudi Aramco is a compelling option for investors seeking exposure to the oil and gas industry, particularly those who prioritise dividend income. However, investors should be aware that it is nearly impossible to buy Saudi Aramco shares if you are not a Saudi Arabian resident.
The only individuals eligible to purchase shares in Aramco are Saudi nationals, Gulf Cooperation Council (GCC) nationals, and certain foreign nationals residing in Saudi Arabia who have a bank account or investment portfolio with a registered bank. There are exceptions. If you are a foreign investor on the main Tadawul exchange, you will need to have a minimum of around $500 million in assets to open an investment account.
However, investors can choose to invest in funds or ETFs such as the iShares MSCI Saudi Arabia ETF that hold Saudi Aramco shares.
If you are eligible to buy the stock, dividend-focused investors may find it appealing. The company has a robust dividend policy, supported by its strong cash flow generation capabilities and its dominant position in the global oil market.
Given the company’s focus on maintaining leadership in traditional energy while also expanding into renewables and other downstream sectors, investors with a long-term outlook may find Saudi Aramco to be an attractive opportunity.
In addition, those with a bullish view of oil prices and energy demand, especially from emerging markets, will also likely see value in Aramco shares.
