Al Rajhi Capital raises Aramco target price to SAR 35/share | ZAWYA MENA Edition:
As Aramco's unique dividend arrangement makes its value broadly unaffected by current volatility in oil price, holding the stock could give a much-desired stability in these uncertain times, said Al Rajhi Capital in a new report.
This is because Aramco’s dividend prioritization of pro rata $75 billion for 2020-24 to non-government shareholders which comes to approximately $1.3 billion based on calculations, is easily manageable given Aramco’s extremely low cost of production, it noted.
This implies a dividend yield of about 5 percent based on a traded price of 31.95 as on Monday.
Al Rajhi Capital has raised the target price for Aramco to 35 Saudi riyals per share. The stock was initiated at a fair price of 37.50 riyals per share in January.
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