Saudi Arabian stock report - Riyad Bank

SAARAB

Riyad Bank hits year-high 11th time in one month January 21, 2018 15:30 AST

NEWS BITES - MIDDLE EAST & NORTH AFRICA

Riyad Bank (TASI:1010), Saudi Arabia's 4th largest Bank by market cap, hit a 52-week high of SAR14.18 during the day, but closed lower at SAR13.88. In the last one month the stock has hit a new 52-week high eleven times and in the last three months twenty-one times. The stock price has decreased 20.0 hallalah (1.4%) from its last trading session of January 18 to close at SAR13.88. Compared with the All Share Index (TASI) which fell 25.7 points (0.3%) in the day, the relative price change was -1.1%. The fall was exacerbated by robust volume of 1.8 times the average daily volume of 816,827 shares.

Highlights in today's Report:

SECTION 1 BULLISH SIGNALS

Fundamentals, Undervaluation [compared with sector average], Technicals, High Performance Indicators, A positive finish to 2017

SECTION 2 BEARISH SIGNALS

Fundamentals, Overvaluation [compared with sector average], Technicals, Low Performance Indicators

SECTION 3 PRICE VOLUME DYNAMICS

Momentum, Moving Annual Return, Beta, Turnover Rate & Turnover Period

SECTION 4 RANKING

Global, Independent Rating

SECTION 5 FINANCIALS

Financials Summary, Trailing 12 Months Dividends

SECTION 6 PROFILE

Activities, Industry & Sector, Top Management, Issued Capital

SECTION 7 STOCK BUZZ

SECTION 1 RIYAD BANK BULLISH SIGNALS

1.1 Fundamentals:

+ The P/E of 12.5 multiplied by the P/NTA of 1.1 is 13.8. Being less than the Benjamin Graham benchmark of 22.5 the stock appears undervalued.

+ The relative yield of the stock, defined by its yield of 4.7%, divided by average yield of dividend yielding stocks in the All Share Index (TASI) of 3.5% is 132.6%. This suggests the stock is undervalued in dividend yield terms.

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.2. Compared with the rest of the market the stock is undervalued and ranks in the top 4% of stock by value of Q Ratio.

+ The company is cash rich with Cash to Market Capitalisation at 51.1%.

+ Revenue and Net Profit growth have shown signs of recovery in recent quarters. [Quarter ended, all figures in %]

QtrRevenue GrowthNet Profit Growth
Sep 1734.127
Jun 17-8.3-19

+ Revenue growth rate has shown signs of recovery in recent years. [Year ended, all figures in %]

YearRevenue GrowthEPS GrowthEBITDA Growth
Dec 1611.9-17.8-16
Dec 15-1.3--

1.2 Undervaluation [compared with sector average]:

+ Price to Book of 1.1 [1.2]. We estimate Riyad Bank stock is trading at a current year Price to Book of 1.1 and a forward year Price to Book of 1.

1.3 Technicals:

+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 13.45 minus the 26-day EMA of 13.04 is positive 0.42 suggesting a bullish signal. Both EMA prices are rising, another bullish signal.

+ The 2.1% discount to 12-month high of SAR14.18 against the 42.0% premium to 12-month low of SAR9.78 suggests the stock continues to push for new highs.

+ In the last three months the stock has hit a new 52-week high twenty-one times, pointing to a significant uptrend.

+ The present value of SAR1,000 (PV1000) invested one year ago in Riyad Bank is SAR1,422, comprising a capital gain of SAR339 and dividend reinvested of SAR84.

PV10001-week1-month1-year
1010.TASI1,0281,0981,422
All Share Index (TASI)1,0101,0391,093

+ The present value of SAR1,000 (PV1000) invested five years ago in Riyad Bank is SAR1,756, including a capital gain of SAR244 and dividend reinvested of SAR512.

+ 5 years Multiplier in SAR = 1.756x

+ Compound Annual Growth Rate (CAGR) in SAR = 11.9%

Present Value of USD1,000 invested 5 years ago:

+ The present value of USD1,000 (PV1000) invested five years ago in Riyad Bank is $US1,757, including a capital gain of $US244 and dividend reinvested of $US513.

+ 5 years ago USD 1 equalled SAR 3.7509

+ 5 years Multiplier in USD = 1.757x

+ Compound Annual Growth Rate (CAGR) in USD = 11.9%

Jan 21, 2018: USD 1 equals SAR 3.75

1.4 High Performance Indicators:

DescriptionValueRank In Market
Price/MAP2001.23In Top 7%
EBITDA Margin %49.7In Top Quartile
Price/MAP501.09In Top Quartile
Earnings Yield %8.0In Top Quartile
P/E * P/NTA13.75In Top Quartile

1.5 A positive finish to 2017

The stock has climbed 12.5% in FY 2017 to close at SAR12.58. The % rise exceeded the % gain in the stock in each of the two preceding financial years. The average daily volume of 820,388 shares in FY 2017 was 0.9 times the average daily volume in FY 2016.

SECTION 2 RIYAD BANK BEARISH SIGNALS

2.1 Fundamentals:

+ Total Liabilities/EBITDA of 49.5 which compares unfavourably with the Joseph Piotroski benchmark of 5.

+ As per the Du Pont analysis, Return on Equity of 8.8% is lower than sector average of 12.1%. This is computed as net profit margin of 45.7% times asset turnover [sales/assets] of 0.04 times leverage factor [total assets/shareholders' equity] of 5.8.

2.2 Overvaluation [compared with sector average]:

+ Return on Equity 8.8% [12.1%].

+ Return on Assets 1.5% [1.8%].

2.3 Technicals:

Overbought/Bearish/Resistance Signals:

+ The Relative Strength Index (RSI) of 84.0 has penetrated the overbought line of 70, suggesting the price gain of 11% in the last 14 days is unusually high.

+ The stock is overbought according to the Williams % R indicator of -17.9, suggesting the price is close to its 14-day high of SAR14.18.

+ The Stochastic indicator of 95.8 has broken through the overbought line of 80; this indicates the price is close to its 14-day high and is likely to revert to a downtrend.

2.4 Low Performance Indicators:

DescriptionValueRank In Market
Price Change %-1.4In Bottom Quartile
Volatility %2.6In Bottom Quartile

SECTION 3 PRICE VOLUME DYNAMICS

3.1 Momentum:

+ Volume: there were 1,485,354 shares worth SAR20.6 million (US$5.5 million) traded today. In the past week, volume was 1.2 times average and the shares were up 2.8%.

3.2 Moving Annual Return

Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 4 of the last 5 years. An investment a year ago in 1010 would have produced a return of 40.1%.

1010Close (SAR)Dividends (SAR)Capital Gain / (Loss) %% YieldAnnual Return %
Jan 2113.880.6533.96.340.1
1 Yr ago10.370.7(3.1)6.53.5
2 Yrs ago10.70.7(35.2)4.2(30.9)
3 Yrs ago16.511.181.87.39.1
4 Yrs ago16.221.345.311.757.0

Close 5 years ago SAR11.16

3.3 Beta:

+ Beta: the Beta of Riyad Bank stock is 0.8. A Beta lower than 1 suggests this is a low risk, low return stock with volatility less than that of the market.

3.4 Turnover Rate & Turnover Period:

+ The turnover rate in the 12 months to date was 5.5% (or a turnover period of 18 years 3 months). This average length of ownership of the stock at 9.4 times the average holding period of 1 year 11 months for stocks in the All Share Index (TASI) suggests a larger number of core investors, making a long-term investment safer.

SECTION 4 RANKING

4.1 Global Rank [out of 47,401 stocks] and Rank in the Middle East & Africa Region [out of 2,278 stocks]

DescriptionValueGlobal RankIn MEA Region
MCap (US$)11.1B1,44532
Total Assets (US$)58B77722
Revenue (US$)2.6B3,60077
Net Profit (US$)891.3M1,12232
Return on Equity %8.815,065858
Net Profit Margin %45.72,226194
Price to Book1.111,762787
Price/Earnings12.76,411606
Yield %4.64,923572
PV$1000 (1Year) US$*1,42511,078372
US$* Change (1Year) %35.512,594400

* 1 year ago USD 1 = SAR 3.76

Jan 21, 2018: USD 1 equals SAR 3.75

4.2 Independent Rating

+ Brand Finance 500:

Riyad Bank was ranked 171 in the Brand Finance list of the world's 500 Valuable Banking brands by brand value in 2015; an improvement over a year from rank 214 in 2014. Brand Finance valued the brand at US$902 million.

+ Forbes 2000:

It is the 1696th largest by revenue in the Forbes Global 2000.

+ BSS/News Bites:

It is placed 25/166 in BSS News Bites' ranking of Saudi Arabian performers in the past year, a percentile ranking of 85.

SECTION 5 RIYAD BANK FINANCIALS

5.1 Financials Summary

Year endedDec 2016Dec 2015Dec 2014
Sales (USD B)2.62.32.4
Pretax (USD)891.3M1.1B-
Net (USD)891.3M1.1B1.2B
EPS (SAR)1.111.35-

Net profit was down 17.5% from US$1.1 billion in 2015 to US$891.3 million in 2016. Earnings Per Share (EPS) was down 17.8% from SAR1.35 to SAR1.11.

5.2 Trailing 12 Months Dividends

Trailing 12 Months ToValue (hallalah)
21 Jan 201865
21 Jan 201770
21 Jan 201670
21 Jan 2015118
21 Jan 2014130

SECTION 6 RIYAD BANK PROFILE

6.1 Activities

Riyad Bank is a Saudi Arabia-based joint stock company operating in the banking and finance sector in compliance with Islamic Sharia. Its main activities are offered through three segments: personal banking, corporate banking and treasury and investment. Personal banking offers services, like current accounts, savings accounts, time deposits, credit cards, loans and borrowings. Its corporate segment provides business banking solutions, such as direct debit solutions, cash management, transfer solutions, online corporate banking, short and long term financing services, transfers and payroll solutions.

6.2 Industry & Sector

Classification LevelName of Sector
Industry GroupBanking Services
IndustryBanks
Economic SectorFinancials
Business SectorBanking & Investment Services

6.3 Top Management

The chief executive officer is Abdulmajeed Abdullah Almobarak.

6.4 Issued Capital

Based on 3,000,000,000 issued shares the market capitalisation is SAR41.6 billion (US$11.1 billion).

SECTION 7 STOCK BUZZ

Corporate Wire

To view Recent Company Headlines, click here

December 29 2017: Riyad Bank Board of Directors recommends distribution of cash dividends to Shareholders for the second half of 2017

Riyad Bank announces that the Board of Directors has recommended on 28-12-2017G corresponding to 10-04-1439H to the General Shareholders Meeting of the Bank to be held in the first quarter of 2018, the distribution of cash dividends for the second half of the year ending 31 December 2017 as follows:

October 18 2017: Riyad Bank announces the interim financial results for the period ended on 30-09-2017 (Nine Months)

August 15 2017: Riyad Bank announces the launching its service to inquire about dividends not-received on the bank's website

In order to safeguard the rights and the interests of the shareholders of Riyad Bank, the Bank hereby announces to its shareholders that a list of the shareholders who have not received their dividends for previous years has been made available on the Bank's website.

July 20 2017: Riyad Bank announces the interim financial results for the period ended on 30-06-2017 (Six Months)

June 23 2017: Riyad Bank announces the distribution of dividends to the Shareholders for the first half of 2017

Riyad Bank announces that the Board of Directors has recommended on 25/09/1438H corresponding to 20/06/2017G, the distribution of cash dividends for the first half of 2017 as follows:

1. Total distribution amount : SAR 1,050 Million.

2. Distribution per share: SAR 0.35

3. Distribution ratio of the nominal value per share 3.5%

4. Number of shares eligible for dividends : 3,000,000,000 shares.

5. The eligibility of dividends shall be for the shareholders owning shares on the due of Sunday 08/10/1438H as per Umm ALQura corresponding to 02/07/2017 and those shareholders registered in the Banks share registry at the Depository Center ( SDC ) at the end of the second trading day following the due date.

Contact: 3030-401-1-966

Physical Address: King Abdul Aziz Road

PO Box 22622

Riyadh 11416

Saudi Arabia

State/Province/Country: Saudi Arabia

Exchange: Saudi Stock Exchange (Tadawul)

ISIN: SA0007879048

SA:1010; SAU:1010; AB:1010; 1010.SE

PermID: 4295887338

Source: www.BuySellSignals.com