Looking for a MENA stock with a dividend yield of over 5 per cent and rampant growth in profit, revenue and margins? Shuaa Capital's Simon Simonian says Etihad Etisalat, the Saudi subsidiary of the UAE national telco, Etisalat, is the region's best telecom stock.
On the back of strong Q4 headline figures announced Sunday, Simonian says his fair value target for the stock is "under revision", and thinks others will also lift their outlook. Money quotes:
We expect Mobily to start paying dividends on a semi-annual basis. We forecast a semi-annual dividend for H1 2011 of SAR 1.00/share. Hence between now and August 2011, shareholders should receive a total of SAR 3.00/share in dividends for a yield of 5.4% based on the last closing price of SAR 55.50. Net debt decreased to SAR 5.86bn [$1.56bn] at year-end 2010, down from SAR 7.06bn a year ago and SAR 6.53bn at the end of Sep. 2010. The balance sheet is strong with a net debt to EBITDA below 1.0x.
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