Despite a grim 2023, Saudi Electricity stock remains very popular among Saudia investors and top-performing international funds. While you can buy Electricity shares directly, sometimes it is worth considering an ETF with Tadawul: 5110 representations.
Saudi Electricity Company (Tadawul: 5110) has garnered considerable interest from investors owing to its robust financial performance, extensive power generation and distribution network, and strategic collaborations with key national and international entities.
The shares of Saudi Electricity Company have gained inclusion in several prominent indices and exchange-traded funds (ETFs) that monitor the performance of the energy sector. Notably, the company's shares are featured in ETFs like the iShares MSCI Saudi Arabia ETF (KSA) and other funds focused on the Saudi Arabian energy market.
The company's commitment to reliable and efficient power supply, as well as its efforts in expanding renewable energy sources, have contributed to its appeal among investors seeking exposure to the energy industry. Saudi Electricity Company's continuous investments in infrastructure development and technological advancements further strengthen its position as a leading player in the sector.
With a strong presence in the Saudi Arabian market and a commitment to sustainable energy solutions, Saudi Electricity Company offers a may present investment option for those interested in capitalizing on the dynamic and evolving energy landscape in the country.
Bank Saudi Electricity Shares – Research and Ratings
- Is Saudi Electricity stock undervalued compared to its fair value, analyst forecasts and its price relative to the market?
- What is the analyst's 12-month Saudi Electricity share price forecast?
- What are Electricity’s future growth expectations?
- How has Saudi Electricity stock performed over the past 5 years?
- Should you buy Saudi Electricity shares or invest in ETFs with "5110" representation?
Understanding Saudi Electricity shares: A brief history
Saudi Electricity Company was incorporated in 2000 and is headquartered in Riyadh, the Kingdom of Saudi Arabia. Saudi Electricity Company (SEC) is a leading entity in Saudi Arabia's energy sector, providing reliable electricity generation, transmission, and distribution services. With strategic partnerships and a focus on digital transformation, Saudi Electricity ensures efficient power supply and contributes to the country's development.
The company’s business activities are divided into five segments:
- Residential Customers: Saudi Electricity serves a significant market segment comprising residential consumers across Saudi Arabia. The company provides electricity services to households, ensuring a reliable power supply for everyday needs and promoting the well-being and comfort of residents.
- Commercial and Industrial Customers: Saudi Electricity caters to the energy requirements of various commercial and industrial entities. This segment includes businesses, offices, shopping malls, factories, and other establishments. Saudi Electricity offers tailored electricity solutions to meet the specific demands of these customers and supports their operational activities.
- Government and Public Sector: Saudi Electricity provides electricity services to government organizations, public institutions, and municipal entities. This market segment includes schools, hospitals, government offices, and public infrastructure, ensuring uninterrupted power supply for essential services and public welfare.
- Utility and Power Distribution: As a major player in the energy sector, Saudi Electricity operates power generation plants, transmission networks, and distribution infrastructure. The company's market segment includes utility companies, independent power producers, and entities involved in power transmission and distribution.
- Renewable Energy: With a growing focus on renewable energy sources, Saudi Electricity is actively involved in the development and expansion of renewable power projects. This market segment encompasses solar, wind, and other clean energy initiatives, contributing to the country's sustainable energy goals.
Saudi Electricity Company serves a diverse range of market segments, encompassing residential, commercial, industrial, governmental, utility, and renewable energy sectors. The company's mission is to ensure a reliable and sustainable supply of electricity to meet the evolving needs of its customers and support the overall development of Saudi Arabia.
Saudi Electricity shares are distributed among 4 categories:
- Sovereign Wealth Funds: 74.3%
- General Public: 16.3%
- Public Companies: 6.93%
- Institutions: 2.61%
The top 25 shareholders own 83.72% of the company, while the top 5 shareholders are:
- The Public Investment Fund of The Kingdom of Saudi Arabia - 74.31%
- Saudi Arabian Oil Company - 6.93%
- The Vanguard Group, Inc. - 0.75%
- BlackRock, Inc. - 0.63%
- Geode Capital Management, LLC - 0.29%
Electricity shares - Fundamental Analysis and Financial Ratings
See the latest Electricity stock price analysis, including valuation, future growth, past performance and more to help you make more informed investment decisions.
Valuation
Is Saudi Electricity stock undervalued compared to its fair value, analyst forecasts and its price relative to the market?
- Electricity stocks are good value based on their Price-To-Earnings Ratio (31.1x) compared to the peer average (58.4x).
- Electricity stocks is expensive based on its Price-To-Earnings Ratio (31.1x) compared to the Asian Electric Utilities industry average (14.3x).
- Electricity stocks are good value based on their Price-To-Earnings Ratio (31.1x) compared to the estimated Fair Price-To-Earnings Ratio (47.7x).
- Electricity stocks (SAR19.34) is trading below analysts' estimate of fair value (SAR54.68)
Future Growth
Saudi Electricity is forecast to grow earnings and revenue by 42.4% and 4.6% per annum respectively. EPS is expected to grow by 30.8% per annum. Return on equity is forecast to be 10.9% in 3 years.
- Earnings vs Savings Rate: Saudi Electricity's forecast earnings growth (42.4% per year) is above the savings rate (14%).
- Earnings vs Market: Saudi Electricity's earnings (42.4% per year) are forecast to grow faster than the Saudi market (6% per year).
- High Growth Earnings: Saudi Electricity's earnings are expected to grow significantly over the next 3 years.
- Revenue vs Market: Saudi Electricity's revenue (4.6% per year) is forecast to grow faster than the Saudi market (0.4% per year).
- High Growth Revenue: Saudi Electricity's revenue 4.6% per year) is forecast to grow slower than 20% per year.
Past Performance
How has Saudi Electricity shares performed over the past 5 years?
- Quality Earnings: Saudi Electricity shares has high quality earnings.
- Growing Profit Margin: Saudi Electricity shares current net profit margins (3.4%) are lower than last year (10.5%).
- Earnings Trend: Saudi Electricity shares earnings have grown significantly by 32.7% per year over the past 5 years.
- Accelerating Growth: Saudi Electricity shares has had negative earnings growth over the past year, so it can't be compared to its 5-year average.
- Earnings vs Industry: Saudi Electricity shares had negative earnings growth (-65.7%) over the past year, making it difficult to compare to the Electric Utilities industry average (1.00%).
Financial Health
What is Saudi Electricity's financial position?
- Short Term Liabilities: Saudi Electricity's short-term assets (SAR33.6B) do not cover its short-term liabilities (SAR57.5B).
- Long Term Liabilities: Saudi Electricity's short-term assets (SAR33.6B) do not cover its long-term liabilities (SAR187.0B).
- Debt Level: Saudi Electricity's net debt to equity ratio (42.7%) is considered high.
- Reducing Debt: Saudi Electricity's debt to equity ratio has reduced from 214.3% to 43.00% over the past 5 years.
- Debt Coverage: Saudi Electricity's debt is well covered by operating cash flow (29.6%).
- Interest Coverage: Saudi Electricity's interest payments on its debt are well covered by EBIT (4.1x coverage).
Dividend
Saudi Electricity is a dividend paying company with a current yield of 3.62% that is well covered by earnings.
- Stable Dividend: Saudi Electricity's dividends per share have been stable in the past 10 years.
- Growing Dividend: Saudi Electricity's dividend payments have not increased over the past 10 years.
- Notable Dividend: Saudi Electricity's dividend (3.62%) is higher than the bottom 25% of dividend payers in the SA market (1.6%).
- High Dividend: Saudi Electricity's dividend (3.62%) is low compared to the top 25% of dividend payers in the SA market (4.73%).
Saudi Electricity's Shares Price Forecast
What is the analyst's 12-month Electricity shares price forecast, and do we have any statistical confidence in the consensus price target from analysts?
Source: simplywall.st
According to Simplywall.st, the SABIC stock 12-month target price is more than 20% higher than the current share price. but there are not enough analysts covering the stock to determine statistical confidence in agreement.
Wallet investor site suggests that the price of Saudi Electricity stock will growth in 2024 compared to the current price, ending the year at an average price of 20.694 SAR. And it reaches 26.386 SAR in 2028.
Important: When considering Saudi Electricity '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. You should know also the Past performance and forecasts are not reliable indicators of future results.
Saudi Electricity Shares - Technical Analysis
The weekly chart illustrates a corrective phase within the long-term uptrend of the Saudi Electricity Stock price, which commenced in 2020.
Notably, the primary support level at SAR 18.00 aligns with the 0.786 Fibonacci retracement level. Sustained price stability above this level will bolster the overarching upward trend, potentially leading to a retest of the resistance level and the 0.5% Fibonacci retracement level at 22.80 Saudi riyals, situated below both the 50-day and 100-day closing moving averages.
How to Invest in Saudi Electricity Shares
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 Saudi Electricity 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 online 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 Saudi Electricity holdings
Saudi Electricity 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 Saudi Electricity 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 Electricity Shares 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.
How to Get Started with CAPEX.com
Here is how to buy and trade stocks, ETFs and other assets with an international, highly regulated broker like CAPEX.com:
- Choose which type of account you want to use. Your first concern should be your risk appetite and time horizon. If you want to buy and hold shares, open an Invest account. If you want to speculate on price movements (including falling prices) with zero commission and leverage, open a CFD trading account.
- Create an account. Regardless of your chosen account, you need to register and complete the KYC process to verify your identity.
- Fund your account with fiat money. Before buying and trading stocks and ETFs, you need to fund your exchange account with U.S. dollars, Euros, or other currencies.
- Place your order. Click on the "Search" icon located in the left panel or by clicking on "ETFs" and then select the instrument, such as " iShares MSCI Saudi Arabia ETF”.
When trading stocks, the CFDs (contracts for difference) are stored in your account and are more liquid than the underlying asset.
However, you should be aware that CFD trading is fast-moving and requires close monitoring. As a result, traders should be aware of the significant risks when trading CFDs. There are margins you need to maintain; if you cannot cover reductions in values, your position might be closed, and you'll have to meet the loss no matter what subsequently happens to the underlying asset.
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Sources:
- Saudi Electricity Company
- Saudi Electricity (SASE:5110) - Stock Price, News & Analysis - Simply Wall St
- Saudi Electricity Company (5110.SR) Stock Price, News, Quote & History - Yahoo Finance
- Saudi Electricity Stock Forecast: 5110 Stock Price Prediction, Long-Term & Short-Term Share Revenue - Walletinvestor