Saudi Arabian stock report - Riyad Bank
UPDATE: Riyad Bank accelerates rise, up 5.4% in 2 days June 22, 2017 15:30 AST
NEWS BITES - MIDDLE EAST & NORTH AFRICA
Riyad Bank (TASI:1010), Saudi Arabia's 5th largest Bank by market cap, has lifted 56.0 hallalah (5.4%) over the past two trading days, compared with the All Share Index (TASI) which rose 473.1 points (6.8%) in the two days for a relative price change of -1.4%. The 2-day rise was fuelled by a cumulative volume of 3.4 times the average 2-day volume of 1.9 million shares. The stock rose 2.6% on Wednesday and 2.7% on Thursday to close at SAR10.94.
RIYAD BANK BULLISH SIGNALS
+ The P/E of 9.9 multiplied by the P/NTA of 0.9 is 8.6. 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 5.9%, divided by average yield of dividend yielding stocks in the All Share Index (TASI) of 3.0% is 198.0%. 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 3% of stock by value of Q Ratio.
+ The company is cash rich with Cash to Market Capitalisation at 64.8%.
+ Revenue growth rate has shown signs of recovery in recent years. [Year ended, all figures in %]
|Year||Revenue Growth||EPS Growth||EBITDA Growth|
1.2 Undervaluation [compared with sector average]:
+ Price/Earnings of 9.9 [11.1].
+ Price to Book of 0.9 [1.3]. We estimate Riyad Bank stock is trading at a current year Price to Book of 0.8 and a forward year Price to Book of 0.8.
+ Dividend yield of 5.9% [3.5%].
Uptrend: The stock rose 2.7%, for a 5-day rise of 6.7%, on high volatility today and expanding price range.
+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 10.46 minus the 26-day EMA of 10.38 is positive 0.08 suggesting a bullish signal. Both EMA prices are rising, another bullish signal.
+ The stock's relative price strength percentile is rising at 52 for 6 months, 71 for 3 months and 86 for 1 month.
+ The present value of SAR1,000 (PV1000) invested ten years ago in Riyad Bank is SAR1,944, including a capital loss of SAR235 and dividend reinvested of SAR1,180.
+ 10 years Multiplier in SAR = 1.944x
+ Compound Annual Growth Rate (CAGR) in SAR = 6.9%
Present Value of USD1,000 invested 10 years ago:
+ The present value of USD1,000 (PV1000) invested ten years ago in Riyad Bank is $US1,941, including a capital loss of $US237 and dividend reinvested of $US1,178.
+ 10 years ago USD 1 equalled SAR 3.7509
+ 10 years Multiplier in USD = 1.941x
+ Compound Annual Growth Rate (CAGR) in USD = 6.9%
Jun 22, 2017: USD 1 equals SAR 3.76
1.4 High Performance Indicators:
|Description||Value||Rank In Market|
|EBITDA Margin %||49.7||In Top Quartile|
|P/E * P/NTA||8.58||In Top Quartile|
|Price Change %||2.7||In Top Quartile|
|Earnings Yield %||10.2||In Top Quartile|
|Total Debt to Equity||0.2||In Top Quartile|
RIYAD BANK BEARISH SIGNALS
+ 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.
2.2 Overvaluation [compared with sector average]:
+ Return on Equity 8.8% [11.9%].
+ Return on Assets 1.5% [1.9%].
+ At SAR10.94 the price has risen above the upper Bollinger band resistance of SAR10.69, indicating a downside risk for it to fall back within the band.
+ The Relative Strength Index (RSI) of 78.4 has penetrated the overbought line of 70, suggesting the price gain of 5.7% in the last 14 days is unusually high.
+ The stock is overbought according to the Williams % R indicator of -7.7, suggesting the price is close to its 14-day high of SAR11.0.
+ The Money Flow Index [MFI] is 91.4 suggesting an overbought 14-day trend, being above 80. The Money Ratio of 10.7 suggests positive money flow was 10.7 times negative money flow.
2.4 Low Performance Indicator:
|Description||Value||Rank In Market|
|Today's Turnover||SAR47.5 million (US$12.6 million)||In Bottom Quartile|
PRICE VOLUME DYNAMICS
+ Volume: there were 4,342,308 shares worth SAR47.5 million (US$12.6 million) traded today. In the past week, volume was 2.0 times average and the shares were up 6.7%. The rise has been propped up by high volume of 2.3 times the average daily volume of 1.9 million shares.
+ Riyad Bank is at a discount of 7.3% to its 12-month high of SAR11.80 on December 28, 2016. It is also at a premium of 27.9% to the 12-month low of SAR8.55 on October 18, 2016.
+ The present value of SAR1,000 (PV1000) invested one year ago in Riyad Bank is SAR1,057, comprising a capital loss of SAR5 and dividend reinvested of SAR62.
|All Share Index (TASI)||1,089||1,081||1,137|
3.2 Moving Annual Return
|1010||Close (SAR)||Dividends (SAR)||Capital Gain / (Loss) %||% Yield||Annual Return %|
|1 Yr ago||11||0.7||(34.9)||4.1||(30.8)|
|2 Yrs ago||16.9||0.73||(5.6)||4.1||(1.5)|
|3 Yrs ago||17.9||1.45||44.9||11.7||56.7|
|4 Yrs ago||12.35||1.3||6.9||11.3||18.2|
+ Beta: the Beta of Riyad Bank stock is 0.7. A Beta lower than 1 suggests this is a low risk, low return stock with volatility less than that of the market.
3.4 Turnover Rate & Turnover Period:
+ The turnover rate in the 12 months to date was 19.3% (or a turnover period of 5 years 2 months). This average length of ownership of the stock at 3.0 times the average holding period of 1 year 8 months for stocks in the All Share Index (TASI) suggests a larger number of core investors, making a long-term investment safer.
4.1 Global Rank [out of 47,401 stocks] and Rank in the Middle East & Africa Region [out of 2,287 stocks]
|Description||Value||Global Rank||In MEA Region|
|Total Assets (US$)||57.9B||719||20|
|Net Profit (US$)||889.8M||1,047||32|
|Return on Equity %||8.8||14,397||889|
|Net Profit Margin %||45.7||2,175||182|
|Price to Book||0.8||8,856||617|
|PV$1000 (1Year) US$*||1,055||23,904||858|
|US$* Change (1Year) %||-3.4||26,204||978|
* 1 year ago USD 1 = SAR 3.75
Jun 22, 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$902 million.
It is the 1696th largest by revenue in the Forbes Global 2000.
It is placed 74/163 in BSS News Bites' ranking of Saudi Arabian performers in the past year, a percentile ranking of 55.
RIYAD BANK FINANCIALS
5.1 Financials Summary
|Year ended||Dec 2016||Dec 2015||Dec 2014|
|Sales (USD B)||2.6||2.3||2.3|
5.2 Annual Report for the year ended December 31, 2016 (year-on-year comparisons with previous corresponding period)-
Riyad Bank Net Profit down 17.5%
Riyad Bank (SA:1010) reported net profit for the year-ended 31 December 2016 of SAR3.3b ($US891m), down 17.5% from SAR4.0b ($US1.1b) in the previous year.
+ Total income up 11.9% from SAR8.7b ($US2.3b) to SAR9.7b ($US2.6b).
+ Net tangible assets per share up 3.4% from SAR12.18 ($US3.2) to SAR12.59 ($US3.4).
+ Net profit down 17.5% from SAR4.0b ($US1.1b) to SAR3.3b ($US891.2m)
+ EPS down 17.8% from SAR1.35 (US35.98c) to SAR1.11 (US29.6c).
+ Operating Cash Flow is negative.
+ EBIT to total assets down 15.3
+ Return on Equity down from 11.1% to 8.8%.
+ Retained earnings to total assets down 5.5% to 1.2%.
5.3 Trailing 12 Months Dividends
|Trailing 12 Months To||Value (hallalah)|
|22 Jun 2017||65|
|22 Jun 2016||70|
|22 Jun 2015||73|
|22 Jun 2014||145|
|22 Jun 2013||130|
RIYAD BANK PROFILE
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 Level||Name of Sector|
|Business Sector||Banking & Investment Services|
|Industry Group||Banking 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 SAR32.8 billion (US$8.7 billion).
To view Recent Company Headlines, click here
June 21: Riyad Bank announces dividend
April 16: Riyad Bank announces the interim financial results for the period ending on 31-03-2017
March 29: Riyad Bank announces the results of shareholder Extraordinary general assembly meeting
March 29: Riyad Bank appoints Chief Executive Officer
March 13: Riyad Bank announces dividend
Physical Address: King Abdul Aziz Road
PO Box 22622
State/Province/Country: Saudi Arabia
Exchange: Saudi Stock Exchange (Tadawul)
SA:1010; SAU:1010; AB:1010; 1010.SE