SASE:7010

Stock Analysis Report

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Market Cap

ر.س267.6b

Last Updated

2021/07/30 14:05 UTC

Data Sources

Company Financials +

Executive Summary

Saudi Telecom Company, together with its subsidiaries, provides telecommunications, information, media, and digital payment services in the Kingdom of Saudi Arabia and internationally. More Details


Snowflake Analysis

Excellent balance sheet established dividend payer.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 7010 is not significantly more volatile than the rest of SA stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: 7010's weekly volatility (3%) has been stable over the past year.


Market Performance


7 Day Return

6.2%

7010

0.9%

SA Telecom

0.6%

SA Market


1 Year Return

37.9%

7010

16.4%

SA Telecom

15.1%

SA Market

Return vs Industry: 7010 exceeded the SA Telecom industry which returned 15.9% over the past year.

Return vs Market: 7010 exceeded the SA Market which returned 14.8% over the past year.


Shareholder returns

7010IndustryMarket
7 Day6.2%0.9%0.6%
30 Day1.8%0.6%-0.3%
90 Day5.5%3.5%0.3%
1 Year44.1%37.9%20.8%16.4%19.5%15.1%
3 Year77.3%55.3%22.0%8.3%43.7%30.5%
5 Year183.4%122.3%26.6%4.7%106.8%75.8%

Long-Term Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

24.28x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 7010 (SAR134) is trading above our estimate of fair value (SAR113.37)

Significantly Below Fair Value: 7010 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 7010 is poor value based on its PE Ratio (24.3x) compared to the Asian Telecom industry average (22.2x).

PE vs Market: 7010 is good value based on its PE Ratio (24.3x) compared to the SA market (33.9x).


Price to Earnings Growth Ratio

PEG Ratio: 7010 is poor value based on its PEG Ratio (3.3x)


Price to Book Ratio

PB vs Industry: 7010 is overvalued based on its PB Ratio (4.1x) compared to the XA Telecom industry average (2.2x).


Future Growth

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

7.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 7010's forecast earnings growth (7.4% per year) is below the savings rate (8.8%).

Earnings vs Market: 7010's earnings (7.4% per year) are forecast to grow faster than the SA market (6.8% per year).

High Growth Earnings: 7010's earnings are forecast to grow, but not significantly.

Revenue vs Market: 7010's revenue (4% per year) is forecast to grow faster than the SA market (3.3% per year).

High Growth Revenue: 7010'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: 7010's Return on Equity is forecast to be low in 3 years time (17.6%).


Past Performance

How has Saudi Telecom performed over the past 5 years?

5.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 7010 has high quality earnings.

Growing Profit Margin: 7010's current net profit margins (18.2%) are lower than last year (19.7%).


Past Earnings Growth Analysis

Earnings Trend: 7010's earnings have grown by 5.1% per year over the past 5 years.

Accelerating Growth: 7010's earnings growth over the past year (1.9%) is below its 5-year average (5.1% per year).

Earnings vs Industry: 7010 earnings growth over the past year (1.9%) underperformed the Telecom industry 14%.


Return on Equity

High ROE: 7010's Return on Equity (17%) is considered low.


Financial Health

How is Saudi Telecom's financial position?


Financial Position Analysis

Short Term Liabilities: 7010's short term assets (SAR49.0B) exceed its short term liabilities (SAR35.3B).

Long Term Liabilities: 7010's short term assets (SAR49.0B) exceed its long term liabilities (SAR22.9B).


Debt to Equity History and Analysis

Debt Level: 7010's debt to equity ratio (13.3%) is considered satisfactory.

Reducing Debt: 7010's debt to equity ratio has increased from 12.2% to 13.3% over the past 5 years.

Debt Coverage: 7010's debt is well covered by operating cash flow (305%).

Interest Coverage: 7010's interest payments on its debt are well covered by EBIT (5760.4x coverage).


Balance Sheet


Dividend

What is Saudi Telecom current dividend yield, its reliability and sustainability?

2.99%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 7010's dividend (2.99%) is higher than the bottom 25% of dividend payers in the SA market (1.46%).

High Dividend: 7010's dividend (2.99%) is low compared to the top 25% of dividend payers in the SA market (4.32%).


Stability and Growth of Payments

Stable Dividend: 7010's dividends per share have been stable in the past 10 years.

Growing Dividend: 7010's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (72.5%), 7010's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 7010's dividends in 3 years are forecast to be covered by earnings (85.5% payout ratio).


Next Steps

Management

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

2.5yrs

Average management tenure


CEO

Ulaiyan Alwetaid

0.33

Tenure

Eng. Olayan Mohammed Alwetaid serves as the Chief Executive Officer of Saudi Telecom Company since March 28, 2021 and served as Senior Vice President of Consumer Business Unit at Saudi Telecom Company. Eng...


Leadership Team

Experienced Management: 7010's management team is considered experienced (2.5 years average tenure).


Board Members

Experienced Board: 7010's board of directors are not considered experienced ( 0.3 years average tenure), which suggests a new board.


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.


Top Shareholders

Company Information

Saudi Telecom Company's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Saudi Telecom Company
  • Ticker: 7010
  • Exchange: SASE
  • Founded: 1998
  • Industry: Integrated Telecommunication Services
  • Sector: Telecom
  • Market Cap: ر.س267.600b
  • Shares outstanding: 2.00b
  • Website: https://www.stc.com.sa

Location

  • Saudi Telecom Company
  • Building 17
  • Prince Moqran Ibn Abdulaziz
  • Riyadh
  • 12464
  • Saudi Arabia

Listings


Biography

Saudi Telecom Company, together with its subsidiaries, provides telecommunications, information, media, and digital payment services in the Kingdom of Saudi Arabia and internationally. The company offers m...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/07/30 14:05
End of Day Share Price2021/07/29 00:00
Earnings2021/03/31
Annual Earnings2020/12/31


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.