Despite a grim 2023, Riyad Bank stock (Tadawul: 1010) remain very popular among Saudia investors and top-performing international funds. While you can buy Riyad Bank shares directly, sometimes it is worth considering an ETF with Riyad Bank representation.
Riyad Bank is a leading financial institution in Saudi Arabia, offering a range of banking and financial services to individuals, businesses, and government organizations. Established in 1957 and headquartered in Riyadh, Riyad Bank is one of the largest banks in the country.
Riyad Bank's shares are listed on the Saudi Stock Exchange (Tadawul) under the ticker symbol "1010" and are widely held by a diverse range of investors, including both domestic and international institutional investors, as well as individual investors. A popular choice among investors looking to gain exposure to the Middle Eastern banking sector, “Tadawul: 1010” has also been included in various global indices and exchange-traded funds (ETFs), such as the iShares MSCI Saudi Arabia ETF (KSA).
Tadawul: 1010 - Research and Ratings
- Is Riyad Bank stock undervalued compared to its fair value, analyst forecasts, and its price relative to the market?
- What is the analyst's 12-month Riyad Bank stock price forecast?
- What are Riyad Bank’s future growth expectations?
- How has STC stock performed over the past 5 years?
- Should you buy Telecom shares or invest in ETFs with "7010" representation?
Understanding Riyad Bank Stock (Tadawul: 1010): A brief history
Riyad Bank is one of the largest financial institutions in Saudi Arabia, offering a wide range of banking and financial services to individuals, businesses, and government organizations.
Historically, Riyad Bank has focused on serving the following market segments:
- Retail Banking: Riyad Bank has a strong presence in the retail banking market, offering a range of personal banking products and services, such as savings accounts, credit cards, personal loans, mortgages, and wealth management services.
- Corporate Banking: Riyad Bank provides a range of financial products and services to large and small businesses in Saudi Arabia, including project financing, working capital financing, trade finance, cash management, and treasury services.
- Investment Banking: Riyad Bank has an active investment banking division, which provides services such as mergers and acquisitions advisory, underwriting, private placements, and equity and debt capital markets.
- Islamic Banking: Riyad Bank has a dedicated Islamic banking unit, which offers Shariah-compliant banking products and services, such as Murabaha, Mudarabah, and Musharakah.
- International Banking: Riyad Bank has a strong international presence, with a network of correspondent banks and representative offices in major financial centers around the world. The bank offers a range of international banking services, including trade finance, foreign exchange, and correspondent banking services.
- Private Banking: Riyad Bank also has a private banking division that provides specialized banking and investment services to high-net-worth individuals and families. This includes investment advisory services, asset management, and wealth planning.
Riyad Bank shares are distributed among 5 categories:
- General Public: 45.7%
- Sovereign Wealth Funds: 21.8%
- Private Companies: 16.8%
- State or Government: 10.4%
- Institutions: 5.24%
- Individual Insiders: 0.118%
The top 25 shareholders own 53.75 % of the Bank, while the top 5 shareholders are:
- The Public Investment Fund of The Kingdom of Saudi Arabia - 21.8%
- General Organization for Social Insurance - 10.4%
- Al Nahla Group of Companies - 8.75%
- Assila Investments Co. - 8.01%
- The Vanguard Group, Inc. - 2.00%
Tadawul: 7010 - Fundamental Analysis and Financial Ratings
See the latest “Tadawul: 1010” stock price analysis, including valuation, future growth, past performance, and more to help you make more informed investing decisions.
Valuation
Is Riyad Bank Stock (Tadawul: 1010) undervalued compared to its fair value, analyst forecasts, and price relative to the market?
- Riyad Bank shares are good value based on its Price-To-Earnings Ratio (10.8x) compared to the peer average (14.7x).
- Riyad Bank shares are expensive based on its Price-To-Earnings Ratio (10.8x) compared to the Asian Banks industry average (9.2x).
- Riyad Bank shares are good value based on its Price-To-Earnings Ratio (10.8x) compared to the estimated Fair Price-To-Earnings Ratio (13.5x).
Future Growth
Riyad Bank is forecast to grow earnings and revenue by 6.2% and 9.4% per annum respectively. EPS is expected to grow by 6.3% per annum. Return on equity is forecast to be 14.7% in 3 years.
- Earnings vs Savings Rate: Riyad Bank's forecast earnings growth (6.2% per year) is above the savings rate (14%).
- Earnings vs Market: Riyad Bank's earnings (6.2% per year) are forecast to grow faster than the Saudi market (6.1% per year).
- High Growth Earnings: Riyad Bank's earnings are forecast to grow, but not significantly.
- Revenue vs Market: Riyad Bank's revenue (9.4% per year) is forecast to grow faster than the Saudi market (0.4% per year).
- High Growth Revenue: Riyad Bank's revenue (9.4% per year) is forecast to grow slower than 20% per year.
Past Performance
How has Riyad Bank Stock performed over the past 5 years?
- Riyad Bank has high-quality earnings.
- Riyad Bank's current net profit margins (55.5%) are higher than last year (56.5%).
- Riyad Bank's earnings have grown by 13.9% per year over the past 5 years.
- Riyad Bank's earnings growth over the past year (11.1%) exceeds its 5-year average (13.9% per year).
- “Tadawul: 1010” earnings growth over the past year (11.1%) exceeded the Banks industry 15.3%.
- Riyad Bank's Return on Equity (13.4%) is considered low.
Financial Health
How is Riyad Bank's financial position?
- Riyad Bank's Assets to Equity ratio (6.4x) is low.
- Riyad Bank has a sufficient allowance for bad loans (142%).
- 91% of Riyad Banks liabilities are made up of primarily low risk sources of funding.
- Riyad Bank has an appropriate level of Loans to Assets ratio (71%).
- Riyad Bank's Loans to Deposits ratio (92%) is appropriate.
- Riyad Bank has an appropriate level of bad loans (1.2%).
Dividend
“Tadawul: 1010”, a company that pays dividends, has a current yield of 5.41% that is well covered by earnings.
- Riyad Bank's dividend payments have been volatile in the past 10 years.
- Riyad Bank's dividend payments have increased over the past 10 years
- Riyad Bank's dividend (5.41%) is higher than the bottom 25% of dividend payers in the Saudi market (1.55%).
- Riyad Bank's dividend (5.41%) is low compared to the top 25% of dividend payers in the Saudi market (4.68%).
- With its reasonably low payout ratio (54.3%), Riyad Bank's dividend payments are well covered by earnings.
- Riyad Bank's dividends over 3 years are forecast to be covered by earnings (53.5% payout ratio).
Riyad Bank Stock Price Forecast
What is the analyst 12-month “Tadawul: 1010” stock price forecast, and do we have any statistical confidence in the consensus price target from analysts?
According to Simplywall.st, the Riyad Bank stock 12-month target price is less than 20% higher than the current share price.
Wallet investor site suggests that the price of Riyad Bank stock will increase in 2024 compared to the current price, ending the year at an average price of 30.136 SAR. And it reaches 45.244 SAR in 2028.
Important: When considering Riyad Bank's fundamental analysis, financial rating and price predictions, it’s important to remember that high market volatility and changing economic environment makes it difficult to give long-term estimates. As such, analysts and algorithm-based platforms can and do get their ratings and predictions wrong. Always do your own research before making an investment decision. And never trade or invest more than you can afford to lose.
Riyad Bank Stock - Technical Analysis
Riyad Bank stock is currently within a descending corrective channel, counter to the uptrend that commenced in May 2022, as depicted in the weekly chart below.
Following the breach of the 100-day closing moving average, it appears that the correction, in accordance with Fibonacci levels, could aim for the 0.618 level, situated near the support level at 27.75 Saudi riyals. Nevertheless, should the price remain above this level, it could bolster the bullish sentiment, potentially targeting the resistance levels at 28.50 and 32.00 Saudi riyals, respectively.
The Fibonacci tool is a good tool that helps day and swing traders to choose entry and exit points, but this tool should not be used in isolation from other technical analysis tools!
How to Invest in Riyad Bank Stock (Tadawul: 1010)
Some investors want to take an active hand in managing their investments, while others prefer to set it and forget it. Your preference may change but decide on an approach to get started.
For most people, stock market investing means choosing among these two investment types:
Individual Tadawul: 1010 shares
If you’re after a specific company, you can buy a single share or a few shares to dip your toe into the stock-trading waters. Building a diversified portfolio out of many individual stocks is possible, but it takes significant investment and research.
If you go this route, remember that individual stocks will have ups and downs. If you research a company and choose to invest in it, think about why you picked that company in the first place if jitters start to set in on a down day.
Traditional stockbrokers allow you to invest in local stocks. However, you might not be able to invest in international stocks listed on the major stock exchanges, global ETFs, and other assets.
ETFs with Tadawul: 1010 holdings
Riyad Bank stock (or any single stock, for that matter) can be a very volatile investment. You can manage the risk you see extreme highs and lows by diversifying your investment holdings. An ETF, for instance, contains a basket of individual stocks. When you invest in a fund, you also own small pieces of each of those companies.
If you want an ETF with Tadawul: 1010 representation, you might consider iShares MSCI Saudi Arabia ETF. BlackRock's iShares is the largest provider of ETFs as calculated by assets under management.
The fund can be suitable for Arab and foreign investors who want liquid and diversified exposure to the top 10 companies listed on the Saudi Stock Exchange:
Why invest in Riyad Bank Stock via KSA?
The iShares MSCI Saudi Arabia ETF seeks to track the investment results of a broad-based index composed of Saudi Arabian equities. With net assets of almost $1B, The iShares MSCI Saudi Arabia ETF (KSA) is the largest exchange-traded fund that seeks to track the investment results of an index composed primarily of frontier market equities along with select emerging market equities.
- Access to the Saudi Arabian stock market, which has historically been closed to foreign investors.
- Targeted exposure to a country with growth potential. with One click accesses to a virtually untapped investment portfolio, including Saudi Stock Exchange and TASI index exposure.
- Use to seek long-term growth and diversification.
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- Create an account. Regardless of your chosen account, you need to register and complete the KYC process to verify your identity.
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Sources:
Riyad Bank (SASE:1010) Stock Valuation - Simply Wall St
Riyad Bank (1010.SR) Stock Price, News, Quote & History - Yahoo Finance