A total of 63 Tadawul-listed companies are trading below the market price-to-earnings ratio (P/E) of 15.4x based on their trailing 12 months (TTM) net income, according to a new study by Argaam.
Meanwhile, the P/E of 26 firms stood below 10x.
Bank Aljazira came on top with P/E of 5.3x, after booking a capital gain of SAR 209 million from a land sale. Excluding the one-off gain, the bank would have traded at a P/E of 6.9x.
Arab National Bank (ANB) came second with P/E ratio of 6.1x, followed by Banque Saudi Fransi and The Saudi British Bank (SABB) with P/E of 6.4x.
Among 11 cement firms, Arabian Cement traded at the lowest P/E of 7.5x. The company received SAR 17 million in insurance compensation for a blaze at its cement mill.
Saudi Cement traded at a P/E ratio of 10.5x, as Q4-2015 reflected impairment losses of SAR 66.15 million. Adjusting for these losses, P/E would have stood at 9.7x.
In the petrochemical sector, Alujain Corporation had the lowest P/E of 8.3x compared to peers. National Petrochemical Co. (Petrochem) and Advanced Petrochemical Co. followed, trading at P/E ratios of 9.4x and 10.1x, respectively.
Meanwhile, 63 firms are trading below the market P/E ratio of 14.7x over the same period. The list included 32 players trading below 10x P/E, the study added.
Middle East Specialized Cables Co. (MESC) came on top, trading at a P/E of 2.9x, as Q2 results reflected a write-back of provisions for losses in Jordanian unit.
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