STC Stock (Tadawul: 7010)

09:55, 02 May 2023

STC stock Tadawul:7010

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

Saudi Telecom Company (STC) has been focused in recent years on expanding its operations and investing in new technologies, such as 5G networks, to meet the growing demand for high-speed internet and digital services. As a result, the company has been able to maintain its position as a leading player in the Saudi Arabian telecommunications industry and is well-positioned for future growth. 

STC's shares are listed on the Saudi Stock Exchange (Tadawul) under the ticker symbol "7010" and are widely held by a diverse range of investors, including both domestic and international institutional investors, as well as individual investors. The company's shares have also been included in various global indices and exchange-traded funds (ETFs), such as the iShares MSCI Saudi Arabia ETF (KSA). 

STC Stock (Tadawul:7010) - Research and Ratings

  • Is Saudi Telecom stock undervalued compared to its fair value, analyst forecasts, and its price relative to the market?  
  • What is the analyst's 12-month STC share price forecast? 
  • What are Saudi Telecom’s future growth expectations? 
  • How has STC stock performed over the past 5 years? 
  • Should you buy Telecom shares or invest in ETFs with "7010" representation? 

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Understanding STC Stock: A brief history 

Established in 1998 and headquartered in Riyadh, Saudi Telecom Company, together with its subsidiaries, provides telecommunications, information, media, and digital payment services in the Kingdom of Saudi Arabia and internationally.  

We can divide Saudi Telecom Company (STC) growth into those segments historically:    

  • Fixed-line services: When STC was first established in 1998, it held a monopoly on all fixed-line telecommunications services in Saudi Arabia. These services included voice calls, fax, and data transmission over copper wires. 
  • Mobile services: STC launched its mobile services in 1999, becoming the first operator to offer mobile telecommunications in Saudi Arabia. The company initially offered 2G services and later upgraded to 3G and 4G technologies. and now 5G technologies. 
  • Broadband services: With the increasing demand for high-speed internet, STC began offering broadband services to its customers. The company provides various broadband packages, including ADSL, fiber-optic, and wireless internet services. 
  • Enterprise services: STC offers a range of services tailored to meet the needs of businesses and government organizations, including voice and data services, cloud computing, managed services, and cybersecurity solutions. 
  • International operations: In addition to its operations in Saudi Arabia, STC has expanded its presence globally by acquiring stakes in telecommunications companies in other countries. The company has operations in Kuwait, Bahrain, Malaysia, Turkey, South Africa, and India. 
  • Digital services: STC has invested heavily in developing digital services, such as e-commerce, digital advertising, and mobile applications. These services are aimed at providing customers with innovative and convenient ways to access services and products.

Over the years, STC has continuously adapted to changes in the market and introduced new services to meet the evolving needs of its customers. The company's focus on innovation and customer satisfaction has helped it maintain its position as one of the leading telecommunications providers in the region. 

STC shares are distributed among 3 categories:  

  • Sovereign Wealth Funds: 64.2% 
  • General Public: 31.7% 
  • Institutions: 4.1% 
  • Individual Insiders: 0.01% 

The top 25 shareholders own 67.97% % of the company, while the top 5 shareholders are: 

  • The Public Investment Fund of The Kingdom of Saudi Arabia: 64.23% 
  • The Vanguard Group, Inc: 1.42% 
  • BlackRock, Inc: 1.11% 
  • Geode Capital Management, LLC: 0.27% 
  • Dimensional Fund Advisors LP: 0.15%

STC Stock (Tadawul:7010) - Fundamental Analysis and Financial Ratings 

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

Valuation 

Is STC Stock (Tadawul:7010) undervalued compared to its fair value, analyst forecasts, and price relative to the market? 

  • Is STC stock undervalued compared to its fair value, analyst forecasts, and its price relative to the market? 
  • STC stocks are good value based on its Price-To-Earnings Ratio (18.4x) compared to the peer average (46x). 
  • STC stocks are expensive based on its Price-To-Earnings Ratio (18.4x) compared to the Asian Telecom industry average (18.3x) 
  • STC stocks are good value based on its Price-To-Earnings Ratio (18.4x) compared to the estimated Fair Price-To-Earnings Ratio (25.3x). 
  • STC stocks are trading above analysts' estimate of fair value. 

Future Growth 

Saudi Telecom is forecasted to grow earnings and revenue by 5.9% and 4.3% per annum respectively. EPS and ROE are also expected to grow by 6.7% and 17.2% per year respectively. Analyst coverage for STC stock is good. 

  • Saudi Telecom's forecast earnings growth (5.9% per year) is below the savings rate (8.9%). 
  • Saudi Telecom's earnings (5.9% per year) are forecast to grow faster than the Saudi market (2% per year). 
  • Saudi Telecom's earnings are forecast to grow, but not significantly. 
  • Saudi Telecom's revenue (4.3% per year) is forecast to grow faster than the SA market (4.5% per year). 

Past Performance 

How has STC Stock performed over the past 5 years? 

  • Saudi Telecom's earnings have grown by 2.9% per year over the past 5 years. 
  • Saudi Telecom's earnings growth over the past year (7.6%) exceeds its 5-year average (2.9% per year). 
  • Saudi Telecom's earnings growth over the past year (7.6%) exceeded the Telecom industry's 6.4%. 

Financial Health  

How is Saudi Telecom's financial position?  

  • STC's short-term assets (SAR60.9B) exceed its short-term liabilities (SAR36.4B). 
  • STC's short-term assets (SAR60.9B) exceed its long-term liabilities (SAR24.8B). 
  • STC has more cash than its total debt. 
  • STC's debt-to-equity ratio has increased from 7.3% to 16.9% over the past 5 years. 
  • STC's debt is well covered by operating cash flow (205.4%). 
  • STC earns more interest than it pays, so coverage of interest payments is not a concern. 

Dividend 

“Tadawul:7010” is a dividend-paying company with a current yield of 3.6% that is well covered by earnings. 

  • STC's dividends per share have been stable in the past 10 years. 
  • STC's dividend payments have increased over the past 10 years. 
  • Tadawul:7010's dividend (3.56%) is higher than the bottom 25% of dividend payers in the Saudi market (1.9%). 
  • STC's dividend (3.56%) is low compared to the top 25% of dividend payers in the Saudi market (4.25%). 

>> Best Dividend Stocks

STC Stock Price Forecast 

What is the analyst 12-month STC stock price forecast, and do we have any statistical confidence in the consensus price target from analysts? 

STC Stock Price Forecast
Source: simplywall.st 

According to simplywall.st, the STC stock (Tadawul:7010) 12-month target price is less than 20% higher than the current share price. 

Wallet investor site suggests that the price of STC stock will drop in 2023 compared to the current price, ending the year at an average price of 28.871 SAR. 

There are no 5-year STC stock price forecasts and price predictions. 

Important: When considering Telecom'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. 

STC Stock - Technical Analysis  

The weekly chart of the Tadawul:7010 stock price clearly shows that the price is in a strong uptrend.  
 

STC Stock - Technical Analysis 

The price is trading at the time of writing this report at the level of 45.00 SAR. The trend is showing clear bullish momentum towards the 0.60 Fibonacci retracement level. It is a major resistance level which was a support level. 

Also, we can see that the STC stock is trading above the long moving averages for the closing of 50 days & 100-Days, which may give a strong signal for the completion of the correction movement from a technical point of view. 

Long-term traders will look to see if the price is able to continue with the same momentum if it breaches the 45.00 SAR level, searching for the next resistance level at 49.25 SAR.

>> Learn more about technical analysis with our free trading courses for beginners

How to Invest in STC Stock (Tadawul:7010) 

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 STC 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. 

>> Best Stocks to Buy in 2023 

ETFs with STC holdings 

Al Rajhi 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 SNP representation, you might consider iShares MSCI Saudi Arabia ETF. BlackRock's iShares is the largest provider of ETFs as calculated by assets under management. 

ETFs with STC holdings
 

The fund can be suitable for Arab and foreign investors who want liquid and diversified exposure to the top 7 companies listed on the Saudi Stock Exchange: "Al Rajhi Bank, The Saudi National Bank, Saudi Basic Industries, Aramco - Saudi Arabian Oil, Saudi Telecom, Saudi Arabian Mining, Riyad Bank".

>> Best ETFs for 2023 

Why invest in STC Stock 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.

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

Try a Demo 

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 CFD 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 Frontier and Select EM ETF”.  

When trading stocks, the CFDs (contracts for difference) are stored in your account and are more liquid than the underlying asset.  

However, you should be aware that CFD trading is fast-moving and requires close monitoring. As a result, traders should be aware of the significant risks when trading CFDs. 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 CFDs 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 CFDs 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:  

Saudi Telecom Company (STC) 

Saudi Telecom Company (SASE:7010) Stock Valuation - Simply Wall St 

Saudi Telecom Company (7010.SR) Stock Price, News, Quote & History - Yahoo Finance 

Saudi Tel Stock Forecast: 7010 Stock Price Prediction, Long-Term & Short-Term Share Revenue - Walletinvestor 

FAQs 

Why do investors buy STC shares?  

Investors will buy STC shares to:  

Make a profit from the STC share price rising  

Receive an income from dividends if the company pays them  

Benefit from the effects of compounding  

Investors should be aware they might get back fewer returns than they initially invested. 

Should you invest in Saudi Telecom shares in 2023?  

Whether you buy Saudi Telecom shares directly or invest in an ETF with Saudi Telecom representation is a personal decision you should take depending on your risk tolerance and investing strategy. You should do your own research to develop an informed view of the market. Always make sure to do your own research. And never invest money you cannot afford to lose. 

How do I buy Telecom shares?  

To buy shares in Telecom you'll need a share-dealing account with an online stockbroker offering stocks listed on the Saudi Stock Exchange. Once you have opened your account and transferred funds into it, you'll be able to search and select shares to buy and sell.     

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