aramco tadawul: In-Depth Analysis of Aramco's Performance in the Saudi

Saudi Aramco, or the Saudi Arabian Oil Company, is considered the largest integrated oil company in the world in terms of production and profits. Established as a state-owned national company, it manages one of the largest oil and gas reserves globally. Aramco's listing on the Saudi financial market (Tadawul) in 2019 was a historic event, raising over $25 billion in the largest initial public offering (IPO) at that time. Since then, Aramco's stock (trading symbol: 2222) has become one of the most traded and liquid stocks in the Saudi market, directly influencing the overall index (TASI). Movements in Aramco's stock reflect not only the company's performance but also trends in the Saudi and global economies within the energy sector. The Saudi government retains the majority of shares, with a small percentage available for public trading. This listing has given the Saudi market international momentum and attracted the attention of global investors, supporting the strategic directions of Vision 2030 in diversifying the economy.

In 2024, Aramco reported a net profit of $106.25 billion, a decrease of about 12% compared to 2023, due to a decline in global oil prices. The company's revenues were approximately $436 billion in 2024. The stock price ranged between 27 and 29 Saudi Riyals (approximately $7-8) during this period. The market capitalization reached about $1.74 trillion (6.5 trillion Saudi Riyals), keeping Aramco among the largest companies globally by market value, ahead of most international oil companies. The approximate price-to-earnings (P/E) ratio was 17, reflecting the company's standing among its global peers. Dividend distributions were relatively high, with the company distributing around $110 billion in 2024 and expecting to reduce it to about $85.4 billion in 2025, reflecting changes in profits and the outlook for oil prices. All this data confirms Aramco's stock as a significant financial instrument in Tadawul and one of the pillars of institutional investment in the Kingdom.

Aramco's stock performance in the Tadawul market is influenced by several fundamental factors, most notably global oil price fluctuations, OPEC+ policies, and local and global economic trends. Any change in crude oil prices directly reflects on Aramco's profits and, consequently, on the stock price in Tadawul. Additionally, the Saudi government's plans for investment in infrastructure projects and Vision 2030 programs affect the company's performance. Other factors include geopolitical events in the region, changes in global energy demand, competition from renewable energy companies, and technological developments in the oil and gas industry. Markets continuously monitor Aramco's announcements regarding expansion plans in gas or petrochemicals, as well as shifts in dividend distribution policies. All these elements make Aramco's stock sensitive to economic and political developments, which is reflected in its daily trading and annual performance.

The oil and gas sector is the backbone of the Saudi economy, with Saudi Aramco being the main weight in this sector. Aramco controls the production and export of crude oil in the Kingdom and plays a pivotal role in determining production policies in coordination with OPEC+. In recent years, the sector has undergone transformations due to the global shift towards clean energy, in addition to sharp fluctuations in oil prices due to economic and geopolitical factors. Nevertheless, Aramco has maintained its position as the largest oil producer in the world and has increased its investments in natural gas and petrochemicals to reduce reliance on oil alone. The Saudi oil sector is characterized by high liquidity and high profitability rates, but it faces risks related to price volatility and changes in international policies. Aramco's financial results reflect on the overall indicators of the Saudi market, making it essential to monitor sector developments to understand the trading movements of related stocks.

Although Aramco and Hail Cement (Symbol: 3001) operate in different sectors, the comparison between them highlights fundamental differences in size, impact, and growth patterns. Aramco is a giant oil company with a global influence, while Hail Cement is a medium-sized company specializing in cement production, primarily serving the local market, especially in the northern and central regions. The price of Hail Cement's stock is around 11.60 Saudi Riyals, compared to Aramco's higher-priced stock. Additionally, Hail Cement's market capitalization is a few billion Riyals, a negligible amount compared to Aramco. The P/E ratio in the cement sector is typically lower than in the oil sector, ranging between 3-8 depending on performance years. Both companies distribute dividends, but Aramco's distributions are significantly larger in absolute value. This comparison reflects the differing nature of risks and opportunities in each sector and highlights the importance of sector diversification in an investor's portfolio.

Aramco's stock constitutes a large percentage of the Saudi financial market index (TASI), meaning that the company's stock movements directly affect the overall market performance. Aramco's weight in the index makes it a benchmark for local and foreign investors when evaluating the Saudi market. If Aramco's stock rises due to higher oil prices or strong earnings announcements, it often supports the overall index's performance. Conversely, if the stock declines due to economic or political conditions, the index may fall even if some other sectors perform well. This close correlation reflects Aramco's centrality in the Saudi economy and underscores the importance of monitoring company news and understanding the dynamics of the energy sector when following the Saudi financial market as a whole.

In the international market, Aramco competes with major oil companies such as ExxonMobil, Shell, Chevron, and Total. Aramco's advantage lies in its low production costs globally, vast oil reserves, and advanced export network. Locally, there are no Saudi companies that directly compete with Aramco in oil, but there are petrochemical companies like SABIC, along with Gulf companies such as ADNOC and Qatar Petroleum. Aramco's main competition comes from global shifts towards renewable energy and increasing investments in hydrogen and solar energy. Aramco seeks to address this competition by diversifying its operations, investing in clean energy technologies, and expanding its operations in gas and petrochemicals, as well as forming strategic partnerships with global companies in technology and energy.

Aramco is known for its generous and regular dividend distribution policy, among the highest of companies listed in Tadawul. In 2024, the company distributed about $110 billion in dividends, with expectations to reduce distributions to $85.4 billion in 2025 due to declining profits. Dividends are distributed quarterly, benefiting shareholders, including the Saudi government, which holds the largest share of stocks. The distribution policy reflects Aramco's commitment to providing stable returns to investors despite market challenges. Dividends are an attractive factor for investors seeking regular income. However, it is important to note that dividends are directly affected by the company's annual results and financial management policies, and they are subject to risks from oil price fluctuations and changes in the global investment climate.

In 2024, Aramco announced a decline in net profits due to falling oil prices, which reflected on its distribution policy that saw a reduction in 2025. The company continued to implement expansion plans in production capacity, preparing to add 3 million barrels per day if necessary. Hail Cement, on the other hand, recorded a slight improvement in profit margins due to increased demand for construction materials during the summer and expected to benefit from government housing projects in 2025. The company has not seen significant structural changes recently but focuses on improving production efficiency and adopting energy-saving manufacturing technologies. Both companies closely monitor changes in energy prices and housing lending policies, as they have a direct impact on demand in their markets.

Although Aramco and Hail Cement are established companies in the Saudi market, investing in their stocks carries risks that should be noted. For Aramco, oil price volatility is the primary factor determining profits and stock value, while geopolitical events and environmental regulatory measures may affect global demand. Hail Cement is more affected by fluctuations in local demand for construction materials and changes in government policies related to housing and real estate financing. Additionally, cement companies face challenges related to energy costs, competition from local companies, and self-sufficiency in some areas. Investors are always advised to study financial reports and monitor sector updates and asset distribution to mitigate risks associated with focusing on one stock or sector.

Sector diversification is one of the fundamental principles of risk management in stock investment, especially in a market like Tadawul where major companies like Aramco dominate the overall index. Distributing investments across different sectors – such as oil, petrochemicals, cement, banking, and telecommunications – helps achieve a balance in returns and reduce risks from sudden fluctuations in a specific sector. For example, if the oil sector faces pressure due to declining prices, other sectors such as construction or telecommunications may perform better. Diversification also allows for capitalizing on opportunities in sectors linked to government development and Vision 2030 projects, providing greater flexibility to adapt to economic and strategic changes in the Kingdom.

The Saudi financial market (Tadawul) provides advanced electronic platforms that allow investors to monitor stock performance daily and in real-time. To track Aramco's stock (2222) or Hail Cement (3001), one can visit the official Tadawul website or use licensed brokerage platforms that offer analytical tools and financial indicators. It is important to review quarterly and annual financial statements, news reports, and official disclosures regarding dividend distributions and management changes. It is also recommended to monitor general economic indicators, oil prices, OPEC+ policies, and news about government projects, as they have a direct impact on listed companies. Relying on reliable sources and verifying information is essential for making informed investment decisions.

The energy sector, represented by Aramco, is expected to remain a cornerstone of the Saudi economy for years to come, despite challenges related to the transition to clean energy. Continued investments in gas and petrochemicals, along with the enhancement of renewable energy projects, will give Aramco a better ability to adapt to global changes. The construction and building materials sector benefits from government plans to develop housing, infrastructure, and new economic zones like NEOM. This ongoing demand positively reflects on companies like Hail Cement, which focuses on improving production efficiency and expanding its market share. Overall, growth prospects are contingent on developments in the Saudi economy, government policies, and companies' responses to technological and environmental changes.