Saudi Aramco, officially known as the Saudi Arabian Oil Company, stands as the world’s largest oil producer and is headquartered in Saudi Arabia. Renowned for its immense profitability, it even rivals tech giants like Apple and Microsoft. 

But first, let’s go back to how it all started.
 

Brief history of Saudi Aramco

Founded in 1933 through a deal with Standard Oil of California, Saudi Aramco began drilling and achieved its first commercial oil production in 1938. By 1949, production hit 500,000 barrels per day, supported by the construction of the Trans-Arabian Pipeline.

The Saudi government acquired a 25% stake in 1973, increasing to full ownership by 1980. Officially established as the Saudi Arabian Oil Company in 1988, Aramco expanded through global partnerships and significant R&D investments in the 1990s.
 

Saudi Aramco’s record-breaking IPO 

Saudi Aramco made headlines globally in 2019 as it shattered records to become the largest initial public offering (IPO) in history. With a valuation that captured the attention of investors worldwide, this event marked a significant milestone in the energy sector and beyond.

In Saudi Aramco’s IPO, the company raised $25.6 billion by selling 3 billion shares at 32 riyals ($8.53) each, which valued the company at around $1.7 trillion, establishing it as the most valuable publicly traded company globally at the time.

Saudi Aramco’s financials 

And as of mid-May 2024, Saudi Aramco stands as the world’s biggest oil exporter and gas company by market capitalization with a market cap of $1.92 trillion, followed by the US-based oil and energy company, Exxon Mobil at $536.69 billion, and another US-based global energy company, Chevron at $299.79 billion. 

Consequently, Saudi Aramco maintains its position as the world's largest oil producer and the sixth-largest company in the world by market cap. (via CompaniesMarketCap, Investopedia)

Moreover, according to TradingView, as of May 20, 2024, Saudi Aramco has a total market cap of 7.20 trillion SAR ($1.92 trillion) and is trading at 29.9 SAR ($7.97). 

Furthermore, Saudi Aramco’s dividends are paid quarterly. The last dividend per share was 0.48 SAR. As of May 20, 2024, the Dividend Yield (TTM)% is 5.70%. (via TradingView)

Looking ahead: Saudi Aramco’s plan for 2030

At the Future Investment Initiative (FII) 2018, Saudi Aramco highlighted its alignment with Saudi Arabia’s Vision 2030 and its strategic role in shaping the kingdom's economic future. President and CEO Amin Nasser emphasized the company's commitment to diversification, industrialization, job creation, and entrepreneurship, among other objectives.

During the event, Saudi Aramco signed 15 MoUs worth US $34 billion with international partners, supporting Vision 2030's goals in refining, chemicals, localization, investment, and job creation. 

The company also emphasized its R&D efforts, showcasing innovations in energy efficiency, carbon capture, and direct crude oil conversion to chemicals.

At the FII Marketplace, Saudi Aramco exhibited its technological advancements, reinforcing its status as a global leader in sustainable energy solutions aligned with Saudi Vision 2030. (via Saudi Aramco)

Why is Saudi Aramco a good investment opportunity? 

• Global leader in energy with extensive reserves and production capabilities.
• Stable and reliable revenue streams from essential commodities like oil and gas.
• Strong financial performance, demonstrating profitability and cash flow generation.
• Strategic positioning in the Middle East, with established partnerships globally.
• Actively diversifying operations into refining, chemicals, and renewables.
• Focus on technological innovation to enhance operational efficiency and sustainability.
• Benefits from strong government support and alignment with national economic priorities.
   

Tip from amana: How to invest in Saudi Aramco

If you’re keen on trading and investing in Saudi Aramco, here are some tips that we can share with you:

• Know the Company

Conduct thorough research on Saudi Aramco's business model, financial performance, growth potential, and industry risks.

• Assess Risk and Goals

Evaluate your risk tolerance and investment objectives to ensure they align with investing in Saudi Aramco, considering the oil and energy sector's volatility.

• Use Professional Platforms

Choose a reputable brokerage firm like amana to use advanced, reliable, and user-friendly trading platforms that suit your trading needs. With amana, you can choose between amana.app, amanaWeb, or MT4/MT5 trading platforms.

• Diversify Your Portfolio

Consider diversifying your investment portfolio across different asset classes and sectors to potentially boost returns. Thankfully, there are more than 5,500 assets on the amana app, which you can choose from!

• Long-Term Outlook

Keep a long-term perspective for investing in Saudi Aramco, understanding that short-term fluctuations are possible while focusing on the company's growth potential over time.
 

Read more: How to buy Aramco shares in Dubai with amana
 

Bottom line

In conclusion, Saudi Aramco's historic IPO has created immense opportunities for traders in the energy sector. With its valuation and strategic importance, Saudi Aramco remains a compelling asset. 

To make the most of trading opportunities, investors like you should conduct thorough research and use reliable platforms like amana to maximize your trading potential.

And don’t forget, you can trade Saudi Aramco and other MENA stocks at ZERO cost on amana!

Get started today!