Aramco Stock: Comprehensive Analysis of Financial Performance and Dividends

Aramco stock represents the listed share of the Saudi national oil company, which is one of the largest oil and gas companies in the world in terms of revenue and reserves. Aramco stock was first listed on the Saudi Tadawul market in December 2019, achieving the largest initial public offering in history. The Saudi government holds an absolute majority of the stock, with a limited percentage available for public trading, ensuring relative stability for the stock compared to other companies. The importance of Aramco stock stems not only from its financial size but also from its direct impact on the general index of the Saudi stock market (TASI). The movement of the stock significantly affects market sentiment and investor mood. Moreover, Aramco stock is seen as a powerful tool for attracting local and global capital, especially after opening the door for foreign investment in the Saudi market. This strategic importance makes monitoring Aramco stock performance a necessity for anyone interested in developments in the Saudi economy and global energy markets.

Saudi Aramco features a unique ownership structure compared to other companies listed in the Saudi market. The Saudi government controls over 90% of the company's shares, granting it the ability to support the stock during crises and manage dividend distributions. The remaining percentage (less than 10%) is traded among local and international investors, with increasing interest from foreign investors after allowing them to trade through regulated channels. This government control provides stability to Aramco stock and protects it from sharp fluctuations often seen in the global energy sector. At the same time, the free float percentage offers opportunities for individual and institutional investors to enter the Saudi energy market. This ownership policy reflects the state's desire to maintain sovereignty over the oil sector while balancing the attraction of foreign investments.

Aramco stock witnessed relatively solid performance during 2024 and 2025 compared to the fluctuations of global oil markets. The stock price at the end of 2024 was around 30 Saudi Riyals, with slight fluctuations linked to crude oil prices and geopolitical developments. The company achieved operating revenues exceeding $436 billion and net profits nearing $106 billion in 2024, with a relative decline from 2022–2023 levels due to falling oil prices and global demand. The stock continued to distribute generous dividends, with annual distributions amounting to approximately $75 billion. The price-to-earnings (P/E) ratio stabilized at levels of 8–10, reflecting the continued relative attractiveness of the stock in the Saudi market, especially for investors seeking steady cash returns. It is noteworthy that the stock remains one of the most liquid in the market, with high trading volumes due to the interest of local and global investors.

The price of Aramco stock is influenced by a range of internal and external factors. First, the global oil price is the most prominent of these factors, as the company's revenues depend heavily on Brent and West Texas crude prices. Any fluctuations in prices directly affect profit expectations and, consequently, the stock price. Second, oil production policies followed by Saudi Arabia and OPEC+ contribute to determining revenue and cash flow levels. Third, local economic developments, such as new listings or adjustments in government support, affect investor appetite and confidence in the stock. Fourth, global shifts in the energy sector, such as the increasing demand for clean energy and changes in international environmental policies, may pressure future oil demand and reflect on the stock's valuation. Finally, liquidity in the Saudi Tadawul market plays a role in determining how quickly the stock price responds to pivotal events.

Saudi Aramco adheres to a cash distribution policy classified among the highest globally, targeting an annual distribution of $75 billion to shareholders. These distributions are divided into four quarterly payments, providing a regular cash flow for shareholders. The size of the distributions depends on net profits achieved, but the company has shown commitment to maintaining distribution levels even amid fluctuations in oil prices, benefiting from its massive financial reserves and government support. This approach is particularly attractive to investors seeking stable and regular income. It is important to note that a significant portion of the distributions goes to the Saudi government and the National Development Fund as they are the largest shareholders, while individual and institutional investors receive the remaining percentage according to their shares.

The price-to-earnings ratio is one of the most important indicators that investors look at when evaluating Aramco stock. At the end of 2024, the P/E ratio ranged between 8 and 10 times, which is relatively low compared to averages in the Saudi and global markets. This ratio indicates that the stock is trading at a price reflecting conservative expectations for future profit growth, which in turn reflects Aramco's nature as a company with strong cash flows but relatively limited growth prospects amid the global shift towards clean energy. Nevertheless, the low P/E ratio provides a relative advantage for investors looking to capture shares of high-dividend companies, as the return on investment is attractive relative to the purchase price. It should be emphasized that the P/E ratio is not the sole indicator for decision-making, but should be considered in the context of other indicators such as growth, distributions, and sector risks.

Aramco stock represents one of the most liquid stocks in the Saudi Tadawul market, due to its large size and high daily trading volumes. High liquidity allows investors to enter and exit the stock with relative ease, reducing the risks of sharp price fluctuations. However, Aramco stock is not immune to the volatility of global oil markets and geopolitical events, although government support and the limited percentage of free float shares mitigate the severity of these fluctuations compared to international energy companies. High liquidity also reflects the interest of institutional investors and local and global funds in the stock, especially after its inclusion in emerging market indices. Ultimately, the high liquidity of the stock provides a relatively stable trading environment that attracts various categories of investors.

Aramco stock falls within the oil, gas, and energy sector, holding an undisputed leading position in the Saudi and regional market. No other local oil company rivals Aramco in size or influence. Regionally, there are large national oil companies in Gulf countries (such as ADNOC in the UAE and Kuwait Petroleum in Kuwait), but they are often not listed in financial markets in the same way and do not reach Aramco's size in terms of market value or revenues. Globally, Aramco competes with giant companies such as ExxonMobil, Shell, Chevron, and BP, but what distinguishes Aramco is its strong government support and production stability. In the value chain, Aramco benefits from its acquisition of SABIC and its presence in refining and petrochemicals, providing it with an additional competitive advantage in facing global changes in energy demand.

Aramco stock is the largest component of the general index (TASI) in the Saudi Tadawul market, giving it a pivotal impact on the overall market performance. Any movement in the stock price, whether upward or downward, leads to a noticeable change in the value of the general index. This impact makes Aramco stock a mini-indicator of investor confidence in the Saudi economy and the energy sector specifically. For example, when the company announces strong financial results or high dividend distributions, it is often followed by an increase in the general index. Conversely, any decline in the stock's performance due to falling oil prices or other negative events may adversely affect market sentiment as a whole. Therefore, Aramco stock is viewed as a stabilizing element or a key driver in the Saudi financial market.

In May 2024, the Saudi government announced its intention to offer an additional tranche of Aramco shares for public trading, in a move aimed at enhancing liquidity in the market and attracting new investments to the National Development Fund. The offering amounted to approximately 1.545 billion shares, priced between $7.12 and $7.73 per share. This offering sparked wide interest among local and international investors, but it was accompanied by some concerns about the impact of increased supply on the stock price in the short term. The company confirms that the offering is part of a broader strategy to diversify national income sources and support infrastructure and renewable energy projects. So far, this move has not significantly affected the stock's stability, thanks to high demand and liquidity, but it remains a sign of the evolving Saudi market and its increasing openness to foreign investments.

Saudi Aramco, like other global oil companies, faces increasing challenges due to the global shift towards renewable energy and environmental pressures to reduce carbon emissions. In recent years, Aramco has intensified its investments in clean energy projects, including establishing a renewable energy investment fund with billions of dollars in investments. These initiatives aim to keep pace with changes in global market trends and maintain long-term profitability sustainability. Nevertheless, the company's main revenues still depend on crude oil sales. The coming years are expected to witness a gradual shift in the revenue structure with the growth of gas, green hydrogen, and petrochemical projects. This strategy may help enhance Aramco's position and extend the life cycle of the stock in the face of future changes.

The main risks for Aramco stock are distributed between oil price volatility, heavy reliance on oil revenues, and regulatory and environmental challenges. Any sharp decline in global oil prices could lead to a decrease in profits and distributions, negatively impacting the stock price. Additionally, the global shift towards clean energy imposes pressures on future oil demand growth. On the other hand, Aramco offers exceptional opportunities due to its government support, high liquidity, and generous distribution policy. If the company succeeds in diversifying its income sources through gas and renewable energy projects, these steps could contribute to sustaining returns and enhancing the stock's position in the Saudi and global markets.

To buy Aramco stock, an investor needs to open a trading account with one of the licensed brokerage firms in the Saudi financial market (Tadawul). After completing the registration procedures and activating the account, the investor can place buy or sell orders for the stock through the broker's electronic trading platform. The market allows individual and institutional investors, both local and foreign, to trade Aramco stock within the available percentage of free float shares. Most brokerage firms provide technical and financial reports to help investors track the stock's performance, and company disclosures and quarterly reports can be accessed through the official Tadawul website. It is essential to note that trading stocks involves risks related to price volatility, and it is advisable to review financial statements and analyze key indicators before making any investment decision.

Saudi Aramco plays a pivotal role in achieving the objectives of the Kingdom's Vision 2030, which aims to diversify the Saudi economy and reduce reliance on oil as a primary source of income. The company seeks to support economic transformation by investing in new sectors such as renewable energy, petrochemicals, and energy technology, in addition to supporting infrastructure and sustainable development projects. This role positively reflects on the company's image among investors, as Aramco is viewed as a key tool for achieving financial and economic sustainability for the Kingdom. In the long term, the company's success in diversifying its income sources and enhancing its operational efficiency could support stock stability and reduce risks associated with oil price fluctuations.