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Alinma Stock (Tadawul:1150)

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Alinma Stock (Tadawul:1150)
Cristian Cochintu
Cristian Cochintu
11 October 2023

Despite a grim 2022, Alinma Bank stock remains very popular among Saudia investors and top-performing international funds. While you can buy Alinma shares directly, sometimes it is worth considering an ETF with Tadawul: 1150 representation. 

Alinma Bank (Tadawul: 1150) has attracted considerable interest among investors due to its impressive financial performance, comprehensive range of banking products and services, and strategic collaborations with prominent local and international entities. 

The shares of Alinma Bank have gained inclusion in various renowned indices and exchange-traded funds (ETFs) that monitor the performance of the banking sector. Notably, the bank's shares are featured in ETFs like the iShares MSCI Saudi Arabia ETF (KSA) and other funds that focus on the Saudi Arabian financial market. 

Alinma Bank's commitment to innovation, customer-centric approach, and Sharia-compliant banking practices have contributed to its appeal among investors seeking exposure to the banking industry. The bank's emphasis on digital transformation and technological advancements further enhances its competitiveness and positions it as a leading player in the market. 

With a solid reputation, strong growth trajectory, and a focus on delivering value to its shareholders, Alinma Bank May present investment option for those interested in capitalizing on the thriving Saudi Arabian banking sector. 

Alinma Shares – Research and Ratings  

  • Is Alinma stock undervalued compared to its fair value, analyst forecasts and its price relative to the market?  
  • What is the analyst's 12-month Alinma share price forecast? 
  • What are Alinma Bank’s future growth expectations? 
  • How has Alinma stock performed over the past 5 years? 
  • Should you buy Alinma shares or invest in ETFs with "1150" representation? 

    

Understanding Alinma Bank shares: A brief history 

Alinma Bank was incorporated in 2006 and is headquartered in Riyadh, the Kingdom of Saudi Arabia. Bank Alinma, a leading Saudi Arabian financial institution, is known for its customer-centric approach and commitment to innovation. With a strong presence and strategic partnerships, it offers a range of convenient and reliable banking services, including personal, corporate, and Islamic banking, supported by advanced digital platforms. 

The bank’s business activities are divided into four segments:   

  • Retail Banking: Alinma Bank offers a range of retail banking services to individual customers, including current, education, and family accounts, as well as self-service banking options. They also provide various card services such as debit, credit, traveler, purchase, and prepaid cards, along with point-of-sale services. Financing options include car, real estate, personal, and education loans, as well as mortgage, consumer, and commercial financing products. Additionally, Alinma Bank offers bill payment.
  • Services. Corporate Banking: Alinma Bank caters to the banking needs of corporate clients. Their services encompass treasury, letters of guarantee, documentary collection, import and export letters of credit, and guarantee verification services. They also provide cash management solutions, corporate partner services, and various finance and investment products. Additionally, Alinma Bank offers financial services such as payroll management and payment gateway services to corporate customers. 
  • Investment Services: Alinma Bank provides investment management, asset management, custodianship, advisory, underwriting, and brokerage services. They also operate as an insurance agent, offering insurance products to customers. 
  • Digital Banking: Alinma Bank offers comprehensive digital banking services to cater to the evolving needs of customers, ensuring convenient and secure banking experiences. 

Alinma Bank shares are distributed among 4 categories: 

  • General Public: 82.3% 
  • Sovereign Wealth Funds: 10.0% 
  • Institutions: 7.6% 
  • Individual Insiders: 0.2% 

The top 25 shareholders own 16.91% of the bank, while the top 5 shareholders are: 

  • The Public Investment Fund of The Kingdom of Saudi Arabia - 10% 
  • The Vanguard Group, Inc. - 1.99% 
  • BlackRock, Inc. - 1.49% 
  • FMR LLC - 0.97% 
  • Geode Capital Management, LLC - 0.41% 

Alinma shares - Fundamental Analysis and Financial Ratings 

See the latest Alinma stock price analysis, including valuation, future growth, past performance and more to help you make more informed investment decisions. 

Valuation 

Is Alinma stock undervalued compared to its fair value, analyst forecasts and its price relative to the market? 

  • Price-To-Earnings vs Peers: Alinma stocks is expensive based on its Price-To-Earnings Ratio (17.2x) compared to the peer average (12.7x). 
  • Price-To-Earnings vs Industry: Alinma stocks is expensive based on its Price-To-Earnings Ratio (17.2x) compared to the Asian Banks industry average (13.5x) 
  • Price-To-Earnings vs Fair Ratio: Alinma stocks are expensive based on its Price-To-Earnings Ratio (17.2x) compared to the estimated Fair Price-To-Earnings Ratio (13.5x). 
  • Below Fair Value: Alinma stocks (SAR33.15) is trading above analysts' estimate of fair value (SAR17.74). 

Future Growth 

Alinma Bank is forecasted to grow earnings and revenue by 13.8% and 13.9% per annum respectively. EPS is expected to grow by 13.7%. Return on equity is forecast to be 17% in 3 years. 

  • Earnings vs Savings Rate: Alinma Bank's forecast earnings growth (13.8% per year) is above the savings rate (9.1%). 
  • Earnings vs Market: Alinma Bank's earnings (13.8% per year) are forecast to grow faster than the Saudi market (2.8% per year). 
  • High Growth Earnings: Alinma Bank's earnings are forecast to grow, but not significantly. 
  • Revenue vs Market: Alinma Bank's revenue (13.9% per year) is forecast to grow faster than the Saudi market (1.9% per year). 
  • High Growth Revenue: Alinma Bank's revenue (13.9% per year) is forecast to grow slower than 20% per year. 

Past Performance 

How have Alinma Bank shares performed over the past 5 years? 

  • Quality Earnings: Alinma Shares has a high earnings. 
  • Growing Profit Margin: Alinma Shares current net profit margins (51.5%) are higher than last year (48.5%). 
  • Earnings Trend: Alinma Shares earnings have grown by 6.2% per year over the past 5 years. 
  • Accelerating Growth: Alinma Shares earnings growth over the past year (30.3%) exceeds its 5-year average (6.2% per year). 
  • Earnings vs Industry: Alinma Shares earnings growth over the past year (30.3%) exceeded the Banks industry 20.4%. 

Financial Health 

What is Alinma Bank 's financial position? 

  • Asset Level: Alinma Bank's Assets to Equity ratio (6.9x) is low. 
  • Allowance for Bad Loans: Alinma Bank has a sufficient allowance for bad loans (130%). 
  • Low Risk Liabilities: 96% of Alinma Bank's liabilities are made up of primarily low risk sources of funding. 
  • Loan Level: Alinma Bank has an appropriate level of Loans to Assets ratio (71%). 
  • Low Risk Deposits: Alinma Bank's Loans to Deposits ratio (87%) is appropriate. 
  • Level of Bad Loans: Alinma Bank has an appropriate level of bad loans (1.9%). 

Dividend 

Alinma Bank is a dividend paying company with a current yield of 3.62% that is well covered by earnings.

  • Notable Dividend: Alinma Bank's dividend (3.62%) is higher than the bottom 25% of dividend payers in the Saudi market (1.75%). 
  • High Dividend: Alinma Bank's dividend (3.62%) is low compared to the top 25% of dividend payers in the Saudi market (4.63%). 
  • Stable Dividend: Alinma Bank has been paying a dividend for less than 10 years and during this time payments have been volatile. 
  • Growing Dividend: Alinma Bank's dividend payments have increased, but the company has only paid a dividend for 8 years. 

Alinma Shares Price Forecast 

What is the analyst's 12-month SABIC shares price forecast, and do we have any statistical confidence in the consensus price target from analysts?

Alinma Shares Price Forecast

Source: simplywall.st 

According to Simplywall.st, the Alinma stock 12-month target price is less than 20% higher than the current share price. 

Wallet investor site suggests that the price of Alinma stock will growth in 2023 compared to the current price, ending the year at an average price of 40.466 SAR. And it reaches 68.122 SAR in 2028. 

Important: When considering Alinma Bank's fundamental analysis, financial rating and price predictions, it’s important to remember that high market volatility and changing economic environment makes it difficult to give long-term estimates. As such, analysts and algorithm-based platforms can and do get their ratings and predictions wrong. Always do your own research before making an investment decision. And never trade or invest more than you can afford to lose. You should know also the Past performance and forecasts are not reliable indicators of future results. 

Alinma Shares - Technical Analysis 

Since the start of 2022, Alinma Bank's share price has demonstrated remarkable performance, reaching its highest point at 42.40 Saudi riyals, as depicted in the weekly chart below. 

Alinma Shares - Technical Analysis

Notably, there are indications of increasing upward momentum. A 'golden crossover' has occurred, marked by the price crossing above the 50-day moving average, surpassing the 100-day moving average. This is typically considered a bullish signal. What adds intrigue to this scenario is that this crossover aligns with the triangle pattern observed in the price chart above, potentially paving the way for further growth and a test of the key resistance level at SAR 40.

How to Invest in Alinma Shares 

Some investors want to take an active hand in managing their investments, while others prefer to set it and forget it. Your preference may change but decide on an approach to get started. 

For most people, stock market investing means choosing among these two investment types: 

Individual Alinma shares 

If you’re after a specific company, you can buy a single share or a few shares to dip your toe into the stock-trading waters. Building a diversified portfolio out of many individual stocks is possible, but it takes significant investment and research.  

If you go this route, remember that individual stocks will have ups and downs. If you research a company and choose to invest in it, think about why you picked that company in the first place if jitters start to set in on a down day.  

Traditional stockbrokers allow you to invest in local stocks. However, you might not be able to invest in international stocks listed on the major stock exchanges, global ETFs and other assets.  

ETFs with Alinma Bank holdings 

Alinma stock (or any single stock, for that matter) can be a very volatile investment. You can manage the risk you see extreme highs and lows by diversifying your investment holdings. An ETF, for instance, contains a basket of individual stocks. When you invest in a fund, you also own small pieces of each of those companies.  

If you want an ETF with Alinma Bank representation, you might consider iShares MSCI Saudi Arabia ETF. BlackRock's iShares is the largest provider of ETFs as calculated by assets under management. 

iShares MSCI Saudi Arabia ETF

The fund can be suitable for Arab and foreign investors who want liquid and diversified exposure to the top 10 companies listed on the Saudi Stock Exchange:

Al Rajhi BankAlAhli Bank
Aramco - Saudi Arabian OilSaudi Arabian Mining
SABICSaudi Telecom
Riyad BankAlinma Bank
Saudi ElectricityBank Albilad

Why invest in Alinma Shares via KSA? 

The iShares MSCI Saudi Arabia ETF seeks to track the investment results of a broad-based index composed of Saudi Arabian equities. With net assets of almost $1B, The iShares MSCI Saudi Arabia ETF (KSA) is the largest exchange-traded-fund that seeks to track the investment results of an index composed primarily of frontier market equities along with select emerging market equities.

  1. Access to the Saudi Arabian stock market, which has historically been closed to foreign investors. 
  2. Targeted exposure to a country with growth potential. with One click accesses to a virtually untapped investment portfolio, including Saudi Stock Exchange and TASI index exposure. 
  3. Use to seek long-term growth and diversification. 

How to Get Started with CAPEX.com 

Here is how to buy and trade stocks, ETFs and other assets with an international, highly regulated broker like CAPEX.com: 

  • Choose which type of account you want to use. Your first concern should be your risk appetite and time horizon. If you want to buy and hold shares, open an Invest account. If you want to speculate on price movements (including falling prices) with zero commission and leverage, open a trading account. 
  • Create an account. Regardless of your chosen account, you need to register and complete the KYC process to verify your identity. 
  • Fund your account with fiat money. Before buying and trading stocks and ETFs, you need to fund your exchange account with U.S. dollars, Euros, or other currencies. 
  • Place your order. Click on the "Search" icon located in the left panel or by clicking on "ETFs" and then select the instrument, such as " iShares MSCI Saudi Arabia ETF”. 

    

When trading stocks, the margin contracts are stored in your account and are more liquid than the underlying asset.  

However, you should be aware that margin contracts trading is fast-moving and requires close monitoring. As a result, traders should be aware of the significant risks when trading margin contracts. There are margins you need to maintain; if you cannot cover reductions in values, your position might be closed, and you'll have to meet the loss no matter what subsequently happens to the underlying asset. 

With CAPEX, you can trade on +2.000 stocks and invest in +5.000 stocks and ETFs with ownership. 

Free trading tools and resources 

Before you start investing in shares, you should consider using the educational resources we offer like CAPEX Academy or a demo trading account. CAPEX Academy has lots of free trading courses for you to choose from, and they all tackle a different financial concept or process – like the basics of analyses – to help you to become a more informed trader. 

Our demo account is a great place for you to learn more about leveraged trading, and you’ll be able to get an intimate understanding of how margin contracts work – as well as what it’s like to trade with leverage – before risking real capital. For this reason, a demo account with us is a great tool for investors who are looking to make a transition to leveraged trading.  

Sources: 

FAQs about Alinma Shares

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Cristian Cochintu
Cristian Cochintu
financial_writer

Cristian Cochintu writes about trading and investing for CAPEX.com. Cristian has more than 15 years of brokerage, freelance, and in-house experience writing for financial institutions and coaching financial writers.