Al Rajhi Banking and Investment (SASE:1120) - Share price, News & Analysis

Q: What is the Fair Price of 1120 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

1120 (SAR84.2) is trading above our estimate of [[fair value]] (SAR63.28)

1120 fundamental analysis
Snowflake Score
Valuation	0/6
Future Growth	4/6
Past Performance	4/6
Financial Health	6/6
Dividends	4/6

1120 Stock Overview

Al Rajhi Banking and Investment Corporation, together with its subsidiaries, provides banking and investment services in the Kingdom of Saudi Arabia and internationally.

Rewards

Price-To-Earnings ratio (21.7x) is below the SA market (25.5x)

Earnings are forecast to grow 14.15% per year

Earnings grew by 34.6% over the past year

Risk Analysis

High level of non-cash earnings

Unstable dividend track record

Al Rajhi Banking and Investment Competitors

Saudi National Bank

SASE:1180

ر.س284.5b

Riyad Bank

SASE:1010

ر.س97.5b

Saudi British Bank

SASE:1060

ر.س78.1b

Alinma Bank

SASE:1150

ر.س67.8b

Price History & Performance

Summary of all time highs, changes and price drops for Al Rajhi Banking and Investment
Historical stock prices
Current Share Price	ر.س84.20
52 Week High	ر.س117.40
52 Week Low	ر.س66.00
Beta	0.56
1 Month Change	-12.38%
3 Month Change	-15.70%
1 Year Change	22.03%
3 Year Change	93.01%
5 Year Change	214.51%
Change since IPO	1,885.01%

Recent News & Updates

May 24

Here's Why I Think Al Rajhi Banking and Investment (TADAWUL:1120) Might Deserve Your Attention Today

It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks...

Jan 31

If You Like EPS Growth Then Check Out Al Rajhi Banking and Investment (TADAWUL:1120) Before It's Too Late

Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story...

Shareholder Returns

	1120	SA Banks	SA Market
7D	-2.0%	2.1%	1.6%
1Y	22.0%	23.9%	12.5%

Return vs Industry: 1120 underperformed the SA Banks industry which returned 23.9% over the past year.

Return vs Market: 1120 exceeded the SA Market which returned 12.5% over the past year.

Price Volatility

Is 1120's price volatile compared to industry and market?
1120 volatility
1120 Average Weekly Movement	5.2%
Banks Industry Average Movement	6.1%
Market Average Movement	4.9%
10% most volatile stocks in SA Market	7.2%
10% least volatile stocks in SA Market	3.1%

Stable Share Price: 1120 is not significantly more volatile than the rest of SA stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: 1120's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1957	15,078	Waleed Bin Abdullah Al-Mogbel	https://www.alrajhibank.com.sa

Al Rajhi Banking and Investment Corporation, together with its subsidiaries, provides banking and investment services in the Kingdom of Saudi Arabia and internationally. The company operates through four segments: Retail, Corporate, Treasury, and Investment Services and Brokerage. It offers current, future, affluent, private, ladies, business, and escrow accounts; personal, auto, home, car, real estate, fleet, payroll, POS merchant, contract, invoice, and working capital finance services; credit and debit cards; and personal accident, medical, staff guarantee, marine cargo, engineering, machine breakdown, property, vehicle, and professional responsibility insurance products.

Al Rajhi Banking and Investment Fundamentals Summary

How do Al Rajhi Banking and Investment's earnings and revenue compare to its market cap?
1120 fundamental statistics
Market Cap	ر.س336.80b
Earnings (TTM)	ر.س15.54b
Revenue (TTM)	ر.س24.38b

21.7x

P/E Ratio

4.3x

P/B Ratio

Is 1120 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
1120 income statement (TTM)
Revenue	ر.س24.38b
Cost of Revenue	ر.س0
Gross Profit	ر.س24.38b
Other Expenses	ر.س8.83b
Earnings	ر.س15.54b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	3.89
Gross Margin	100.00%
Net Profit Margin	63.76%
Debt/Equity Ratio	0.0%

How did 1120 perform over the long term?

See historical performance and comparison

Dividends

2.1%

Current Dividend Yield

39%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 1120 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

0/6

Valuation Score 0/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 1120?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 1120. This is calculated by dividing 1120's market cap by their current preferred multiple.
What is 1120's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	ر.س336.80b

1120 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	n/a
Enterprise Value/EBITDA	n/a
PEG Ratio	1.5x

Price to Earnings Ratio vs Peers

How does 1120's PE Ratio compare to its peers?

1120 PE Ratio vs Peers

The above table shows the PE ratio for 1120 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	21.4x
1180 Saudi National Bank	21.4x	22.3%	ر.س284.5b
1010 Riyad Bank	15.7x	13.0%	ر.س97.5b
1060 Saudi British Bank	24.2x	23.3%	ر.س78.1b
1150 Alinma Bank	24.3x	21.5%	ر.س67.8b
1120 Al Rajhi Banking and Investment	21.7x	14.2%	ر.س336.8b

Forward PE

Price-To-Earnings vs Peers: 1120 is expensive based on its Price-To-Earnings Ratio (21.7x) compared to the peer average (21.4x).

Price to Earnings Ratio vs Industry

How does 1120's PE Ratio compare vs other companies in the Asian Banks Industry?

Price-To-Earnings vs Industry: 1120 is expensive based on its Price-To-Earnings Ratio (21.7x) compared to the SA Banks industry average (21x)

Price to Earnings Ratio vs Fair Ratio

What is 1120's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

1120 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	21.7x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate 1120's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of 1120 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 1120 (SAR84.2) is trading above our estimate of fair value (SAR63.28)

Significantly Below Fair Value: 1120 is trading above our estimate of fair value.

Price to Earnings Growth Ratio

PEG Ratio: 1120 is poor value based on its PEG Ratio (1.5x)

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Future Growth

How is Al Rajhi Banking and Investment forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

14.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1120's forecast earnings growth (14.2% per year) is above the savings rate (9%).

Earnings vs Market: 1120's earnings (14.2% per year) are forecast to grow faster than the SA market (-1.2% per year).

High Growth Earnings: 1120's earnings are forecast to grow, but not significantly.

Revenue vs Market: 1120's revenue (16.5% per year) is forecast to grow faster than the SA market (-2.9% per year).

High Growth Revenue: 1120's revenue (16.5% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 1120's Return on Equity is forecast to be high in 3 years time (25.2%)

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Past Performance

How has Al Rajhi Banking and Investment performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

13.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 1120 has a high level of non-cash earnings.

Growing Profit Margin: 1120's current net profit margins (63.8%) are higher than last year (58.8%).

Past Earnings Growth Analysis

Earnings Trend: 1120's earnings have grown by 13.8% per year over the past 5 years.

Accelerating Growth: 1120's earnings growth over the past year (34.6%) exceeds its 5-year average (13.8% per year).

Earnings vs Industry: 1120 earnings growth over the past year (34.6%) exceeded the Banks industry 24.5%.

Return on Equity

High ROE: 1120's Return on Equity (19.8%) is considered low.

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Financial Health

How is Al Rajhi Banking and Investment's financial position? (This company is analysed differently as a bank or financial institution)

Financial Health Score

6/6

Financial Health Score 6/6

Asset Level
Allowance for Bad Loans
Low Risk Liabilities
Loan Level
Low Risk Deposits
Level of Bad Loans

Financial Position Analysis

Debt to Equity History and Analysis

Balance Sheet

Financial Institutions Analysis

Asset Level: 1120's Assets to Equity ratio (8.4x) is low.

Allowance for Bad Loans: 1120 has a sufficient allowance for bad loans (308%).

Low Risk Liabilities: 94% of 1120's liabilities are made up of primarily low risk sources of funding.

Loan Level: 1120 has an appropriate level of Loans to Assets ratio (74%).

Low Risk Deposits: 1120's Loans to Deposits ratio (89%) is appropriate.

Level of Bad Loans: 1120 has an appropriate level of bad loans (0.6%).

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Dividend

What is Al Rajhi Banking and Investment current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

2.08%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 1120's dividend (2.08%) is higher than the bottom 25% of dividend payers in the SA market (1.91%).

High Dividend: 1120's dividend (2.08%) is low compared to the top 25% of dividend payers in the SA market (4.42%).

Stability and Growth of Payments

Stable Dividend: 1120's dividend payments have been volatile in the past 10 years.

Growing Dividend: 1120's dividend payments have increased over the past 10 years.

Current Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (38.6%), 1120's dividend payments are well covered by earnings.

Future Payout to Shareholders

Future Dividend Coverage: 1120's dividends in 3 years are forecast to be covered by earnings (51.5% payout ratio).

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Management

How experienced are the management team and are they aligned to shareholders interests?

1.4yrs

Average management tenure

CEO

Waleed Bin Abdullah Al-Mogbel (45 yo)

2.42yrs

Tenure

ر.س180,000

Compensation

Mr. Waleed Bin Abdullah Ali Al-Mogbel serves as Chief Executive Officer of Al Rajhi Banking and Investment Corporation since January1, 2020 and served as its Deputy Chief Executive Officer until Jnauary 1,...

Leadership Team

Experienced Management: 1120's management team is not considered experienced ( 1.4 years average tenure), which suggests a new team.

Board Members

Experienced Board: 1120's board of directors are considered experienced (7.6 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/28 00:00
End of Day Share Price	2022/06/28 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31