Aramco Dividend Distribution: Everything You Need to Know

Dividend distribution is the process by which companies convert a portion of their net profits into payments to shareholders, either in the form of cash or additional shares. In the case of Saudi Aramco, this concept gains special importance due to the company's central role in the national economy. Aramco is the largest company listed on the Tadawul market, with the state owning the majority of its shares, making its cash distributions a primary source of revenue for the Saudi budget. Distributed profits play a crucial role in the attractiveness of the stock for investors seeking regular income, as they reflect confidence in the company's sustainability and its ability to generate strong cash flows, even amid fluctuations in oil prices. Aramco's dividend distribution policy is not merely a financial decision but a key component of the national economic strategy, contributing to financing development projects and the Kingdom's Vision 2030.

Since its listing on the Saudi stock exchange, Aramco has adhered to a clear and transparent dividend distribution policy. This policy stipulates a minimum annual distribution of 75 billion Saudi Riyals (approximately 18.75 billion Riyals per quarter), in addition to a percentage of the remaining net profits (usually 35%) if the basic profits exceed this amount. The company reaffirms its commitment to this policy in its periodic statements, even during periods of oil price volatility or declining revenues. The goal of this policy is to achieve stability in shareholder returns and enhance investor confidence in the long term. Aramco stands out among its global peers due to the stability of its distributions and the strength of its financial position, making it a preferred choice for investors seeking sustainable fixed income.

Aramco announces its dividend distribution schedule quarterly, specifying the eligibility date (the last day an investor must own the stock to qualify for the distribution) and the payment date (the date the dividends are transferred to bank accounts). In 2024, the eligibility date for the fourth-quarter dividends is set for March 17, 2025, with payments scheduled for March 26, 2025. The same policy continues in 2025, with a distribution of 0.3278 Riyals per share in each of the first, second, and third quarters, with eligibility and payment dates announced in detail on the official website and the Tadawul platform. Knowing these dates is essential for shareholders planning to benefit from distribution returns.

In 2024, Aramco provided regular quarterly dividends to its shareholders, with each share receiving 0.3145 Riyals in the first three quarters, rising to 0.3278 Riyals in the fourth quarter. Additionally, performance-linked bonuses from previous years were worth 0.1670 Riyals per share in some quarters, raising the total annual distribution to approximately 1.7757 Riyals per share. In 2025, distributions remained at 0.3278 Riyals per quarter until the end of the third quarter. This stability in cash returns reflects Aramco's strong cash flows and provides shareholders with a clear outlook on their expected annual income from the stock.

Aramco dividends are automatically paid to shareholders registered in the 'Edaa' system of the Saudi financial market. Investors must own the stock before the announced eligibility date. After that, the dividend amounts are directly transferred to the bank accounts linked to their investment portfolios on the specified payment date. Investors do not need to take any additional action to receive the dividends, as the process is fully electronic. It is always advisable to verify the accuracy of bank account details with the brokerage firm to ensure prompt receipt. The company provides additional details about dates and payment mechanisms on its official website and the Tadawul platform.

Aramco's stock (symbol 2222) is among the largest stocks listed in the Saudi market in terms of market capitalization, which exceeded one trillion Riyals in 2024. The company's net income in 2024 was approximately 398.4 billion Riyals, with free cash flows amounting to 320 billion Riyals. The stock price ranged between 8 and 10 Riyals during the year, providing an annual distribution yield of approximately 13% to 17%. The price-to-earnings (P/E) ratio recorded low levels compared to global oil companies (between 5 and 10 times), reflecting the market's view of stable profits and strong cash flows. The debt ratio decreased to 4.5% at the end of 2024, highlighting the company's strong financial position and sustainability of its distribution capacity.

Aramco's distributions are among the highest globally compared to its market value. For example, Aramco often distributes around 10-15% of its market value annually, while major companies like ExxonMobil, Shell, and BP distribute a lower percentage. This is due to Aramco's low production costs and vast reserves, along with government support. The earnings per share in Aramco often outperform its sector peers, making it a focal point for investors seeking stability and high returns in the energy sector.

Aramco's dividend distributions play a pivotal role in financing the public treasury, as a significant portion of the profits goes to the Saudi government. These revenues are used to finance infrastructure projects, health, education, and the pillars of Vision 2030. The stability of these distributions enhances the government's ability to plan long-term financial strategies and reduce the need for external borrowing. Additionally, these revenues contribute to supporting liquidity in the Saudi financial market and stimulating investment activity among individuals and institutions.

Aramco's profits are directly affected by fluctuations in global oil prices; however, the company adheres to a stable distribution policy that provides a minimum income for shareholders. During periods of rising oil prices, the company may decide to distribute additional dividends beyond the minimum. In times of decline, it may suffice with the announced minimum without adjustment. This policy gives shareholders a high degree of certainty about receiving regular income and highlights the company's strength in facing global economic shocks.

In March 2025, Aramco announced strong financial results for 2024 despite declining prices and confirmed the payment of fourth-quarter dividends on March 26, 2025. The company also issued international bonds to support its liquidity and has repeatedly affirmed its commitment to an attractive distribution policy. Recently, the company has continued its local and global expansion projects, enhancing the sustainability of its future profits. These announcements have garnered significant attention from local and international investors due to their direct impact on investment returns.

Shareholders must own the stock on the announced eligibility date to qualify for the cash distribution. This date is determined a few days before the payment date. After the company announces the dividends and sets the eligibility date, the shareholders' register is closed, and the distribution is automatically paid on the specified payment date. Investors are always advised to follow the company's official announcements to avoid losing eligibility due to selling or transferring close to the eligibility date.

The dividend yield is calculated by dividing the total annual distributions by the market price of the stock. In the case of Aramco, the yield in 2024 ranged between 13% and 17%, making it one of the highest yields in the Saudi market and in the global energy sector. This high yield attracts investors seeking sustainable regular income and enhances the stock's position as a strategic long-term investment choice. It is important to note that the yield changes with fluctuations in the stock price and annual distribution values.

The sustainability of Aramco's distributions depends on several factors, most notably: global oil prices, reserve sizes, operational efficiency, and government financial policies. So far, the company has demonstrated its ability to maintain generous distributions even during slow periods. On the other hand, changes in global oil demand, growth in renewable energies, and environmental regulations pose future challenges that may affect the company's profits in the long term. However, Aramco's strong financial position and its diversification strategies remain supportive factors for the continuity of attractive distributions.

For comparison, we can look at Hill Cement's stock (3001) listed on the Tadawul. Although it is in a different sector, Hill Cement's dividend distributions are significantly lower than Aramco's due to differences in company size, industry nature, and the ability to generate massive cash flows. Data on Hill Cement's stock and its distributions can be viewed on the SIGMIX platform: [/stocks/3001/]. These comparisons highlight the significant differences between sectors in the Saudi market and clarify why Aramco excels in cash distributions.