Aramco dividends outstrip rival blue-chips

Aramco

• Saudi Aramco paid average yearly dividends of $73.2bn in 2020-22
• Microsoft and Apple paid less than $20bn a year
• Aramco also paid out more than other Gulf listed companies

Saudi Aramco’s payouts of dividends surpass those of other leading global companies, and the world’s top oil producer provides sizeable returns for its shareholders in monetary terms.

Aramco listed on Riyadh’s bourse in December 2019 following a $29.4 billion initial public offering that sold around 1.7 percent of the government-owned company’s stock.

Since then, it has paid $219.5 billion in dividends for years 2020-2022 combined, averaging $73.2 billion per year and a dividend yield of 3.71 percent over the same period, according to data from Refinitiv.

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Aramco’s payout dwarves those of other global blue-chip companies.

Apple, the world’s most valuable firm by market capitalisation, paid $14.8 billion in dividends in 2022). Microsoft distributed $18.6 billion for its 2022 fiscal year. The software firm is ranked second globally by market value, with Aramco third.

Unsurprisingly, Aramco’s dividends also eclipsed other Gulf heavyweight stocks.

Saudi Basic Industries Corp (Sabic), which is majority-owned by Aramco, paid a total of $9.2 billion from 2020-2022, while fellow petrochemicals producer Industries Qatar distributed $2.9 billion in dividends.

Utilities and telecoms are often the preferred sectors for dividend-seeking investors that prioritise regular payouts over the potential for share price gains.

The two industries are known as defensive sectors due to their relatively consistent earnings throughout economic ups and downs.

Abu Dhabi-based former telecoms operator Etisalat paid $7.6 billion in dividends for the years 2020-2022 to make it the UAE’s biggest dividend distributor. Saudi Telecom Co and former Kuwaiti telecom monopoly Zain paid $6.9 billion and $1.5 billion respectively over the same timeframe.

Banks are also major sources of dividend income. Qatar National Bank, the Middle East and Africa’s largest bank by assets, gave shareholders $4.1 billion in dividends over the three-year period, below the UAE’s First Abu Dhabi’s $5.7 billion in payouts. Government-controlled Saudi National Bank distributed $5.1 billion from 2020-2022.

High yields

Al Rajhi Bank, Saudi’s largest lender by market capitalisation, had an average dividend yield of 3.33 percent from 2018-2022, while SNB’s was 3.53 percent. Sabic averaged 3.94 percent over the same timeframe.

The figure for Saudi Telecom is 4.14 percent, providing investors with a similar yield as Etisalat’s 4.07 percent.

Among the UAE’s largest companies, First Abu Dhabi has provided the highest average dividend yield. From 2018 to 2022, its average dividend yield was 4.47 percent. That compares with 3.63 percent for Dubai bank Emirates NBD.

These are the only listed companies among the UAE’s top 10 by market capitalisation to have paid dividends each year over this five-year period. Five of the others – Adnoc Drilling, Adnoc Gas, Dubai Electricity and Water Authority, Alpha Dhabi Holding and Borouge – went public this decade.

International Holding Company, the UAE’s largest listed company with a market capitalisation of $236 billion, has paid no dividends since at least 2018.

Abu Dhabi National Energy Co (Taqa) provided an average dividend yield of 1.30 percent from 2020 to 2022, having paid no dividends for the preceding two years, Refinitiv data shows. Abu Dhabi’s government controls both companies.