Saturday 1 June 2024

Aramco: #SaudiArabia Tempts New Investors With Lure of $124 Billion Dividend - Bloomberg

Aramco: Saudi Arabia Tempts New Investors With Lure of $124 Billion Dividend - Bloomberg


A top selling point of Saudi Aramco’s plan to offer as much as $12 billion in shares is the chance to reap one of the oil industry’s biggest dividends.

Investors who are willing to look past a steep valuation and the lack of buybacks would cash in on a $124 billion annual payout that Bloomberg Intelligence estimates will give the company a dividend yield of 6.6%. Most of these returns go to Aramco’s biggest shareholder, the Saudi government, which needs the funds to pay for a massive economic transformation plan.

The offering, one of the world’s biggest in recent years, will be a test of foreign investors’ interest after they mostly stayed away from the mega initial public offering in 2019.

“The stock hasn’t performed well recently but it’s a fantastic buy-and-hold position,” said Ryan Lemand, chief executive officer of Neovision Wealth Management. “It is a dividend payout play for institutional investors.”

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