Saudi Arabian stock report - Riyad Bank

SAARAB

Riyad Bank climbs 6.0% on high volume October 19, 2017 15:30 AST

NEWS BITES - MIDDLE EAST & NORTH AFRICA

Riyad Bank (TASI:1010), Saudi Arabia's 4th largest Bank by market cap, has climbed 66.0 hallalah (6.0%) from its last trading session of October 18 to close at SAR11.72. Compared with the All Share Index (TASI) which rose 69.5 points (1%) in the day, the relative price increase was 5.0%. The rise has been propped up by high volume of 2.4 times the average daily volume of 971,693 shares.

Highlights in today's Report:

SECTION 1 BULLISH SIGNALS

Fundamentals, Undervaluation [compared with sector average], Technicals, High Performance Indicators

SECTION 2 BEARISH SIGNALS

Fundamentals, Overvaluation [compared with sector average], Technicals, Overbought/Bearish/Resistance Signals, Low Performance Indicators

SECTION 3 PRICE VOLUME DYNAMICS

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

SECTION 4 RANKING

Global, Independent Ratings

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 10.6 multiplied by the P/NTA of 0.9 is 9.8. 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 5.5%, divided by average yield of dividend yielding stocks in the All Share Index (TASI) of 3.7% is 148.8%. 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 2% of stock by value of Q Ratio.

+ The company is cash rich with Cash to Market Capitalisation at 60.5%.

+ 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 0.9 [1.1]. We estimate Riyad Bank stock is trading at a current year Price to Book of 0.9 and a forward year Price to Book of 0.9.

+ Dividend yield of 5.5% [4.8%].

1.3 Technicals:

Uptrend: The stock rose 6.0% on high volatility today and expanding price range.

+ The 2.8% discount to 12-month high of SAR12.06 against the 36.8% premium to 12-month low of SAR8.57 suggests the stock continues to push for new highs.

+ The present value of SAR1,000 (PV1000) invested one year ago in Riyad Bank is SAR1,453, comprising a capital gain of SAR368 and dividend reinvested of SAR85.

PV10001-week1-month1-year
1010.TASI1,0679831,453
All Share Index (TASI)1,0089631,270

+ The present value of SAR1,000 (PV1000) invested ten years ago in Riyad Bank is SAR1,115, including a capital loss of SAR254 and dividend reinvested of SAR369.

+ 10 years Multiplier in SAR = 1.115x

+ Compound Annual Growth Rate (CAGR) in SAR = 1.1%

Present Value of USD1,000 invested 10 years ago:

+ The present value of USD1,000 (PV1000) invested ten years ago in Riyad Bank is $US1,107, including a capital loss of $US260 and dividend reinvested of $US366.

+ 10 years ago USD 1 equalled SAR 3.7313

+ 10 years Multiplier in USD = 1.107x

+ Compound Annual Growth Rate (CAGR) in USD = 1.0%

Oct 19, 2017: USD 1 equals SAR 3.76

1.4 High Performance Indicators:

DescriptionValueRank In Market
Price Change %6.0In Top 2%
EBITDA Margin %49.7In Top Quartile
Price/MAP2001.11In Top Quartile
Price/MAP501.02In Top Quartile
P/E * P/NTA9.82In Top Quartile
Earnings Yield %9.5In Top Quartile

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 11.9%. 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.

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

QtrRevenue GrowthNet Profit Growth
Jun 17-8.3-19
Mar 178.7257

2.2 Overvaluation [compared with sector average]:

+ Return on Equity 8.8% [11.9%].

+ Return on Assets 1.5% [1.7%].

2.3 Technicals:

+ The price decreased 1.7% in the last month.

2.4 Overbought/Bearish/Resistance Signals:

+ The stock is overbought according to the Williams % R indicator of -17.6, suggesting the price is close to its 14-day high of SAR11.90.

2.5 Low Performance Indicators:

DescriptionValueRank In Market
Volatility %2.8In Bottom Quartile
Today's TurnoverSAR27.7 million (US$7.4 million)In Bottom Quartile

SECTION 3 PRICE VOLUME DYNAMICS

3.1 Momentum:

+ Volume: there were 2,360,206 shares worth SAR27.7 million (US$7.4 million) traded today. In the past week, volume was 0.9 times average and the shares were up 6.7%.

3.2 Moving Annual Return

Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 3 of the last 5 years. An investment a year ago in 1010 would have produced a return of 44.4%.

1010Close (SAR)Dividends (SAR)Capital Gain / (Loss) %% YieldAnnual Return %
Oct 1911.720.6536.87.644.4
1 Yr ago8.570.7(35.4)5.3(30.1)
2 Yrs ago13.260.7(24.9)4(21.0)
3 Yrs ago17.671.1831.88.840.6
4 Yrs ago13.411.320.411.732.1

Close 5 years ago SAR11.13

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 7.2% (or a turnover period of 13 years 9 months). This average length of ownership of the stock at 7.9 times the average holding period of 1 year 8 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 47,822 stocks] and Rank in the Middle East & Africa Region [out of 2,304 stocks]

DescriptionValueGlobal RankIn MEA Region
MCap (US$)9.4B1,66338
Total Assets (US$)57.9B75822
Revenue (US$)2.6B3,56974
Net Profit (US$)889.4M1,10434
Return on Equity %8.814,749881
Net Profit Margin %45.72,256191
Price to Book0.98,652628
Price/Earnings10.05,111477
Yield %5.93,062403
PV$1000 (1Year) US$*1,45310,107376
US$* Change (1Year) %32.111,516419

* 1 year ago USD 1 = SAR 3.76

Oct 19, 2017: USD 1 equals SAR 3.76

4.2 Independent Ratings

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.

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

It is placed 64/164 in BSS News Bites' ranking of Saudi Arabian performers in the past year, a percentile ranking of 61.

SECTION 5 RIYAD BANK FINANCIALS

5.1 Financials Summary

Year endedDec 2016Dec 2015Dec 2014
Sales (USD B)2.62.32.3
Pretax (USD)889.4M1.1B-
Net (USD)889.4M1.1B1.2B
EPS (SAR)1.111.35-

Net profit was down 17.5% from US$1.1 billion in 2015 to US$889.4 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)
19 Oct 201765
19 Oct 201670
19 Oct 201570
19 Oct 2014118
19 Oct 2013130

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
Business SectorBanking & Investment Services
Industry GroupBanking Services
IndustryBanks
Economic SectorFinancials

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 SAR35.2 billion (US$9.4 billion).

SECTION 7 STOCK BUZZ

Corporate Wire

To view Recent Company Headlines, click here

August 15: 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: Riyad Bank announces the interim financial results for the period ended on 30-06-2017 (Six Months)

June 23: 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.

June 21: Riyad Bank announces dividend

Riyad Bank today announced a cash dividend of 35.0 hallalah per share. The ex dividend date is Monday, July 03, 2017 and it is payable on Sunday, July 16.

April 16: Riyad Bank announces the interim financial results for the period ending on 31-03-2017

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