Pharmaceutical stock is one of the prominent stocks listed on the Saudi financial market (Tadawul), attracting investor interest for its representation of an opportunity in the rapidly growing health and retail sector. The stock, affiliated with the Pharmaceutical Services Company, is a key indicator of the vitality of the healthcare sector in the Kingdom of Saudi Arabia, as it falls under the non-food consumer goods sector and focuses on the sale and distribution of medicines and medical supplies. In recent years, the pharmaceutical stock has witnessed significant developments in both financial performance and geographical expansion, supported by population growth and increased health spending, enhancing its position among Saudi stocks with regular distributions. In this comprehensive analysis, we review the key financial indicators, stock performance in the Tadawul market, distribution policies, risks and opportunities in the sector, competition, as well as the latest news and developments affecting the stock's future. This article aims to provide neutral educational information about the pharmaceutical stock without offering recommendations or investment advice, emphasizing the importance of consulting a licensed financial advisor before making any investment decisions.
Definition of Pharmaceutical Stock and Company Activity
Pharmaceutical stock represents the Pharmaceutical Services Company, one of the largest pharmacy chains in the Kingdom of Saudi Arabia. The company was established to develop the pharmaceutical retail sector and expand medical and pharmaceutical services to cover most regions of the Kingdom. Through its corporate management and transparent operations, the company adheres to governance standards under the supervision of the Saudi Capital Market Authority. The company's activities focus on the sale and distribution of medicines and medical supplies, in addition to expanding e-commerce services and home delivery of medicines, enhancing its presence in the local market and keeping pace with developments in the healthcare sector in the Kingdom. The pharmaceutical stock is listed on the main market (Tadawul) under the symbol /4163/, and is considered one of the leading stocks in the non-food consumer goods sector.
Pharmaceutical Stock Price Evolution and Historical Performance
Since its listing on the Saudi financial market, the pharmaceutical stock has experienced fluctuations within a relatively stable range, trading between 60 and 75 Saudi Riyals during 2024. At the beginning of 2025, the stock continued its positive performance, nearing 75 Riyals by mid-year. This movement reflects the market's response to the company's news and financial results, as well as positive developments in the healthcare sector. The stock achieved its highest closing price of over 75 Riyals, while its lowest closing was around 60 Riyals. This fluctuation is considered normal given the market dynamics and investor reactions to the company's results and periodic announcements. Notably, the pharmaceutical stock has benefited from the growing demand for health services and its close connection to state policies supporting the private health sector under Saudi Vision 2030.
Market Capitalization and Capital Structure
The market capitalization of the Pharmaceutical Services Company at the end of 2024 was approximately 5.5 billion Saudi Riyals, rising in some periods to 6.5 billion Riyals in 2025 due to the increase in stock price and the number of outstanding shares, which amounts to about 85 million shares. The company has maintained a stable capital structure, with a capital of 850 million Riyals (85 million shares with a nominal value of 10 Riyals per share). The list of shareholders includes significant investment and government institutions such as Ramlah Holding Company, affiliated with the Public Investment Fund, which obtained approval to transfer about 20% of the pharmaceutical stock to it in 2023. This stability in ownership structure enhances investor confidence and reflects the company's strong financial position.
Income and Profits: Financial Performance Indicators 2024-2025
The financial results of the Pharmaceutical Services Company showed clear growth in revenues and profits during 2024 and 2025. The company's revenues in 2024 reached approximately 1.8 billion Riyals compared to 1.5 billion Riyals in 2023, an increase of nearly 20%. Net profit also rose to about 200 million Riyals in 2024, compared to 160 million Riyals in the previous year. Earnings per share (EPS) recorded levels close to 2.4 Riyals annually. With the continued expansion and increase in the company's branches, revenues and profit growth are expected to continue in 2025, supported by a policy of regular dividend distributions and positive growth indicators in the local market.
Price-to-Earnings (P/E) Ratio and Valuation Analysis
The price-to-earnings (P/E) ratio is one of the most important indicators that investors rely on to assess the attractiveness of a stock. For the pharmaceutical stock, the P/E ratio ranges between 23 and 30 times during 2024 and 2025, depending on the development of profits and the stock price in the market. For example, if the stock price is 70 Riyals and the earnings per share is 3 Riyals, the P/E would be approximately 23. If the stock price reaches 65 Riyals and the earnings per share is 2.4 Riyals, the P/E becomes around 27. This ratio is classified as medium to high in the Saudi market, especially when compared to industrial companies, but it reflects growth expectations in the healthcare sector. It is important to note that the P/E ratio changes continuously based on financial performance and market prices.
Dividend Policy and Yield
The Pharmaceutical Services Company follows a policy of regular cash distributions to its shareholders, supported by profit growth and available liquidity. In the first quarter of 2025, cash dividends were distributed at a rate of 6.3% (i.e., 0.63 Riyals per share), with expectations for such distributions to continue in the remaining quarters. In 2024, total distributions amounted to approximately 1.8 Riyals per share, equivalent to 18% of the nominal value. The annual dividend yield typically ranges between 3% and 4% of the stock price, which is relatively attractive in the Saudi market and reflects the company's commitment to providing sustainable income to shareholders.
Sector Analysis and Competition in the Saudi Pharmacy Market
The pharmacy and medical supplies distribution sector is one of the vital sectors in the Kingdom, supported by increased demand for health and medicines. The pharmaceutical company competes directly with major chains such as Al Nahdi Medical (although not listed), United Pharmacies, and smaller to medium-sized chains. Additionally, competition arises from e-commerce platforms such as 'Noon' and 'Sahati', which target an increasing segment of consumers through online delivery services. Despite the intense competition, the pharmaceutical company benefits from its national position, widespread branches, and investment in digital transformation. Challenges include tightening regulations and increased competition, but opportunities lie in market expansion and increased health spending under Vision 2030.
Key Developments and News Impacting Pharmaceutical Stock
Recently, several positive developments have occurred for the pharmaceutical stock, most notably the announcement of strong financial results and a net profit growth of over 10% for the first quarter of 2025 compared to the same period in 2024. The company also continued its policy of regular distributions and announced the opening of new branches and gradual expansion into new areas within the Kingdom. Additionally, the company saw 20% of its shares transferred to Ramlah Holding Company, affiliated with the Public Investment Fund, which boosted investor confidence. Positive news and analytical reports have focused on the stock's resilience in the face of economic challenges and ongoing support from government entities.
Risks and Challenges of Investing in Pharmaceutical Stock
Despite the attractiveness of the pharmaceutical stock and its stable growth, the stock faces several potential risks, including: tightening health regulations, the entry of new local or foreign competitors, rising drug import costs, or changes in consumer behavior. Additionally, technological transformations such as the rise of online pharmacies may affect the traditional business model. Furthermore, the company's performance depends on general economic indicators, although the healthcare sector is considered more resilient than other sectors. It is important for investors to continuously monitor these risks and developments and assess them when making any investment decisions.
The Role of Technology and Digital Transformation in the Pharmaceutical Company's Strategy
The pharmaceutical company places great importance on digital transformation and developing its online services to keep pace with changes in consumer behavior. The company has launched online platforms to facilitate ordering medicines and providing home delivery services, which has contributed to boosting its sales during and after the pandemic. The company is also exploring partnerships with technology companies to develop smart solutions in inventory management and supply chains, enhancing its operational efficiency. Digital transformation is a key factor in maintaining the company's competitiveness and sustaining its growth in a rapidly changing market.
Impact of Saudi Vision 2030 on the Pharmaceutical Sector
The strategy of the pharmaceutical company aligns with Saudi Vision 2030, which focuses on developing the healthcare sector and increasing the private sector's contribution to medical services. The vision allows national companies to expand their operations and innovate new services, with government support for investment in technology and localization of jobs. This support positively reflects on the pharmaceutical stock's performance and provides the company with greater growth and expansion opportunities, both locally and regionally, especially with the trend towards enhancing comprehensive healthcare and increasing health spending in the Kingdom.
Comparing Pharmaceutical Stock with Other Health Retail Stocks
When comparing the pharmaceutical stock with other stocks in the health retail sector, it is evident that the company enjoys several advantages, including wide distribution, regular cash distributions, and stable growth rates. Despite the relatively high P/E ratio, the stock maintains its attractiveness for investors seeking income stability and long-term growth. Compared to other companies in the sector, such as Al Nahdi, the pharmaceutical stock benefits from being listed on the main market, providing greater liquidity and transparency in financial information. Additionally, stock indicators can be compared with major food and retail sector companies, where the stock shows similar performance despite differing nature and risks.
How to Monitor Pharmaceutical Stock Performance via SIGMIX
The SIGMIX platform allows investors and followers to monitor the performance of the pharmaceutical stock periodically through updated reports and in-depth analyses of financial data and market prices. The platform provides neutral educational analyses, chart indicators, and real-time news about the company and its sector, adhering to the Capital Market Authority's rules by not providing direct recommendations. Users can benefit from tools to compare different stocks and follow regulatory and financial developments that may affect the performance of the pharmaceutical stock. We always recommend staying updated with SIGMIX updates and consulting a licensed financial specialist before making any investment decisions.
Conclusion
The pharmaceutical stock is among the prominent names in the healthcare and retail sector in the Saudi market, supported by stable growth in revenues and profits, along with a regular dividend distribution policy. With geographical expansion and digital transformation, the company continues to strengthen its position in the market and adapt to changes in consumer behavior. However, the investment journey in the stock is not without challenges and risks associated with competition, regulations, and economic developments. It is always important to monitor the latest data and news, and to use platforms like SIGMIX for educational and neutral analyses. Finally, we remind investors of the necessity to consult a licensed financial advisor before making any investment decisions to ensure achieving financial goals on sound and studied foundations.
Frequently Asked Questions
The symbol for pharmaceutical stock on the Saudi financial market (Tadawul) is /4163/. You can monitor the stock's performance, real-time prices, and financial data through the stock's official page on the Tadawul website or via the SIGMIX platform, which provides periodic educational analyses about the stock. It is important to follow news and periodic announcements to know any changes in financial statements or distributions.
The main growth factors for pharmaceutical stock include increased demand for health services and medicines with a growing population, the company's expansion in opening branches, digital transformation and development of e-commerce services, support from Saudi Vision 2030 for the healthcare sector, and a policy of regular profit distributions. All these factors enhance the company's performance and make the stock attractive to investors seeking growth and stability.
The activity of the pharmaceutical company is primarily focused on the local market and depends on consumer demand for health products, so the impact of fluctuations in oil prices or interest rates is less severe compared to other sectors. However, general economic conditions may affect investor sentiment in the market, but demand for medicines usually remains stable due to its vital importance.
The value of cash distributions is determined based on the quarterly and annual profits achieved by the company, and is subject to the approval of the board of directors and the general assembly of shareholders. The distribution ratio and value are usually announced before the entitlement date, and the company is keen to achieve sustainability in distributions in line with available liquidity and expansion needs. In 2025, the distributions for the first quarter amounted to 0.63 Riyals per share.
The main risks include tightening health regulations and increasing licensing requirements, the entry of new local or foreign competitors, rising global drug costs, changes in consumer behavior towards electronic platforms, and fluctuations in the local economy. Investors should monitor these factors and assess their impact on the company's performance before making their investment decisions.
Pharmaceutical stock is characterized by wide distribution, regular profit distributions, and stable revenue growth compared to some of its competitors. Despite a relatively high P/E ratio, the stock maintains its attractiveness for investors seeking stable income and sustainable growth rates. Financial analysis platforms like SIGMIX or Tadawul can be used to compare financial indicators between different stocks in the sector.
Digital transformation is one of the pillars of the pharmaceutical company's strategy, as the company has developed online platforms for ordering and delivering medicines, enhancing its competitiveness and increasing sales, especially during lockdown periods and the COVID-19 pandemic. Investment in technology contributes to improving operational efficiency and increasing customer satisfaction, enhancing future growth opportunities.
Pharmaceutical stock is classified by many as a growth and income stock in a core sector, supported by continuous revenue growth and a policy of regular dividend distributions. However, each investor should carefully study the company's profile, assess risks, and compare the stock with sector alternatives, and not make an investment decision without consulting a licensed financial advisor.
The Public Investment Fund participates through Ramlah Holding Company, which acquired approximately 20% of pharmaceutical stock in 2023. This investment enhances investor confidence in the company and provides long-term strategic support, indicating the company's strength and its ability to attract major governmental and investment capital.
The SIGMIX platform provides detailed reports and educational analyses about pharmaceutical stock, including financial performance, distributions, market indicators, and sector comparisons. The platform offers tools to monitor prices, news, and regulatory developments, while respecting market regulations by not providing direct recommendations. Investors can benefit from this neutral information in making informed investment decisions.