SASE:2010

Stock Analysis Report

Saudi Basic Industries

Executive Summary

Saudi Basic Industries Corporation manufactures, markets, and distributes chemicals, polymers, plastics, agri-nutrients, and metal products worldwide.

Rewards

Trading at 10.7% below its fair value

Earnings are forecast to grow 16.51% per year

Risk Analysis

Dividend of 4.72% is not well covered by earnings

Profit margins (6.5%) are lower than last year (13%)



Snowflake Analysis

Flawless balance sheet second-rate dividend payer.


Similar Companies

Share Price & News

How has Saudi Basic Industries's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 2010 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.3%

2010

-0.3%

SA Chemicals

-0.6%

SA Market


1 Year Return

-23.2%

2010

-18.8%

SA Chemicals

-1.9%

SA Market

Return vs Industry: 2010 underperformed the SA Chemicals industry which returned -19.3% over the past year.

Return vs Market: 2010 underperformed the SA Market which returned -1.7% over the past year.


Shareholder returns

2010IndustryMarket
7 Day-0.3%-0.3%-0.6%
30 Day1.0%2.2%-1.2%
90 Day3.2%4.8%7.0%
1 Year-20.0%-23.2%-15.5%-18.8%1.6%-1.9%
3 Year10.5%-1.8%12.8%0.9%30.9%18.2%
5 Year41.5%10.6%24.0%0.7%22.9%3.3%

Price Volatility Vs. Market

How volatile is Saudi Basic Industries's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Saudi Basic Industries undervalued compared to its fair value and its price relative to the market?

10.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 2010 (SAR93.2) is trading below our estimate of fair value (SAR104.4)

Significantly Below Fair Value: 2010 is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: 2010 is poor value based on its PE Ratio (29.2x) compared to the Chemicals industry average (18.9x).

PE vs Market: 2010 is poor value based on its PE Ratio (29.2x) compared to the SA market (24.2x).


Price to Earnings Growth Ratio

PEG Ratio: 2010 is poor value based on its PEG Ratio (1.8x)


Price to Book Ratio

PB vs Industry: 2010 is overvalued based on its PB Ratio (1.7x) compared to the SA Chemicals industry average (1.6x).


Next Steps

Future Growth

How is Saudi Basic Industries forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

17.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 2010's forecast earnings growth (16.5% per year) is above the savings rate (8.5%).

Earnings vs Market: 2010's earnings (16.5% per year) are forecast to grow faster than the SA market (5.5% per year).

High Growth Earnings: 2010's earnings are forecast to grow, but not significantly.

Revenue vs Market: 2010's revenue (4% per year) is forecast to grow slower than the SA market (4.9% per year).

High Growth Revenue: 2010's revenue (4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 2010's Return on Equity is forecast to be low in 3 years time (8.4%).


Next Steps

Past Performance

How has Saudi Basic Industries performed over the past 5 years?

-5.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 2010 has high quality earnings.

Growing Profit Margin: 2010's current net profit margins (6.5%) are lower than last year (13%).


Past Earnings Growth Analysis

Earnings Trend: 2010's earnings have declined by -5.3% per year over the past 5 years.

Accelerating Growth: 2010's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 2010 had negative earnings growth (-56.5%) over the past year, making it difficult to compare to the Chemicals industry average (-32.6%).


Return on Equity

High ROE: 2010's Return on Equity (7.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Saudi Basic Industries's financial position?


Financial Position Analysis

Short Term Liabilities: 2010's short term assets (SAR93.9B) exceed its short term liabilities (SAR31.7B).

Long Term Liabilities: 2010's short term assets (SAR93.9B) exceed its long term liabilities (SAR65.8B).


Debt to Equity History and Analysis

Debt Level: 2010's debt to equity ratio (22.5%) is considered satisfactory.

Reducing Debt: 2010's debt to equity ratio has reduced from 40% to 22.5% over the past 5 years.

Debt Coverage: 2010's debt is well covered by operating cash flow (76.1%).

Interest Coverage: 2010's interest payments on its debt are well covered by EBIT (26.4x coverage).


Balance Sheet

Inventory Level: 2010 has a high level of physical assets or inventory.

Debt Coverage by Assets: 2010's debt is covered by short term assets (assets are 2x debt).


Next Steps

Dividend

What is Saudi Basic Industries's current dividend yield, its reliability and sustainability?

4.74%

Current Dividend Yield


Dividend Yield vs Market

company4.7%marketbottom25%2.1%markettop25%4.8%industryaverage4.9%forecastin3Years4.6%

Current dividend yield vs market & industry

Notable Dividend: 2010's dividend (4.72%) is higher than the bottom 25% of dividend payers in the SA market (2.19%).

High Dividend: 2010's dividend (4.72%) is low compared to the top 25% of dividend payers in the SA market (4.9%).


Stability and Growth of Payments

Stable Dividend: 2010's dividend payments have been volatile in the past 10 years.

Growing Dividend: 2010's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (137.8%), 2010's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 2010's dividends in 3 years are forecast to be covered by earnings (74% payout ratio).


Next Steps

Management

What is the CEO of Saudi Basic Industries's salary, the management and board of directors tenure and is there insider trading?

4.0yrs

Average management tenure


CEO

Yousef Bin Abdullah Al-Benyan 0

5yrs

Tenure

ر.س772,000

Compensation

Mr. Yousef Bin Abdullah Al-Benyan serves as the Chief Executive Officer of Saudi Basic Industries Corporation and has been its Vice Chairman since October 19, 2015. Mr. Bin Abdullah Al-Benyan served as an  ...


Management Age and Tenure

4.0yrs

Average Tenure

Experienced Management: 2010's management team is considered experienced (4 years average tenure).


Board Age and Tenure

2.8yrs

Average Tenure

63yo

Average Age

Experienced Board: 2010's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.


Insider Trading

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.


Management Team

  • Yousef Bin Abdullah Al-Benyan

    Vice Chairman & CEO

    • Tenure: 5yrs
    • Compensation: ر.س772.00k
  • Abdulrahman Al-Fageeh

    Executive Vice President of Petrochemicals

    • Tenure: 5.9yrs
  • Awadh Al-Maker

    Executive Vice President of Shared Services

    • Tenure: 3.3yrs
  • Samir Al-Abdrabbuh

    Executive Vice President of Agri-Nutrients

    • Ernesto Occhiello

      Executive Vice President of Specialties

      • Tim Leveille

        Executive Vice President of Corporate Finance

        • Tenure: 2yrs
      • Naveena Shastri

        VP & General Counsel

        • Tenure: 3yrs
      • Omar Al-Amoudi

        Executive Vice President of Engineering & Project Management

        • Tenure: 7yrs
      • Abdulaziz Al-Oudan

        Executive Vice President of Corporate Human Resources

        • Tenure: 4.7yrs
      • Bob Maughon

        Executive Vice President of Technology and Innovation

        • Tenure: 0.3yrs

      Board Members

      • Calum MacLean (55yo)

        Director

        • Tenure: 2.3yrs
        • Compensation: ر.س75.86k
      • Abdulaziz Al-Jarbou (71yo)

        Chairman of the Board

        • Khaled bin Hamza Nahas

          Independent Director

          • Compensation: ر.س814.00k
        • Yousef Bin Abdullah Al-Benyan

          Vice Chairman & CEO

          • Tenure: 5yrs
          • Compensation: ر.س772.00k
        • Roberto Gualdoni (63yo)

          Director

          • Tenure: 2.3yrs
          • Compensation: ر.س81.86k
        • Nader Al-Wehibi

          Director

          • Abdullah Bin Mohammed Al-Issa

            Independent Director

            • Tenure: 12.8yrs
            • Compensation: ر.س814.00k
          • Mohammed bin Talal Bin Al-Nahhas

            Independent Director

            • Tenure: 3.3yrs
            • Compensation: ر.س489.48k
          • Rashid bin Ibrahim bin Sharif

            Director

            • Tenure: 1yrs

          Company Information

          Saudi Basic Industries Corporation's company bio, employee growth, exchange listings and data sources


          Key Information

          • Name: Saudi Basic Industries Corporation
          • Ticker: 2010
          • Exchange: SASE
          • Founded: 1976
          • Industry: Commodity Chemicals
          • Sector: Materials
          • Market Cap: ر.س278.700b
          • Shares outstanding: 3.00b
          • Website: https://www.sabic.com

          Number of Employees


          Location

          • Saudi Basic Industries Corporation
          • Damman Highway
          • Qordoba
          • Riyadh
          • 11422
          • Saudi Arabia

          Listings

          TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
          2010SASE (Saudi Arabian Stock Exchange)YesOrdinary SharesSASARDec 1995

          Biography

          Saudi Basic Industries Corporation manufactures, markets, and distributes chemicals, polymers, plastics, agri-nutrients, and metal products worldwide. The company operates through Petrochemicals, Agri-Nutrients, and Hadeed segments. It offers polymers, such as acrylonitrile-butadiene-styrene, metallocene polyethylene, carbon black, polybutylene terephthalate, polybutylene terephthalate, polycarbonate, polyethylene, polyethylene terephthalate, polymethyl methacrylate, polyoxymethylene, polypropylene, polystyrene, polyvinyl chloride, and synthetic rubbers. The company also provides engineering thermoplastic resins and compounds, composites, functional surfaces substrates, ethylene oxide derivatives, additives, and films and sheets, as well as products under the NORYL, ULTEM, EXTEM, and LNP brands. In addition, it offers chemicals, including aromatics, chlor-alkali, ethanolamines, glycols, linear alpha olefins, natural detergent alcohol, olefins and gases, OXO alcohols and performance monomers, and oxygenates. Further, the company provides fertilizers comprising urea, ammonia, and a portfolio of nitrogen-based inorganic products; produces steel products, such as hot and cold rolled flat products, and long products; operates e-business portal for sales; and offers color services under the ColorXpress name. Its polymers are used in automotive, aviation, electronics, construction, alternative energy, and health care industries. The company was founded in 1976 and is headquartered in Riyadh, Saudi Arabia. 


          Company Analysis and Financial Data Status

          All financial data provided by Standard & Poor's Capital IQ.
          DataLast Updated (UTC time)
          Company Analysis2020/01/21 16:37
          End of Day Share Price2020/01/20 00:00
          Earnings2019/09/30
          Annual Earnings2018/12/31


          Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.