Saudi cement producers are expected to cut dividends in the near term, due to local market conditions, Al Rajhi Capital predicted in a new report.
The kingdom’s cement sector has the highest dividend yield in the market at an average of 8.9 percent trailing twelve months (TTM), the report pointed out.
Yanbu Cement was highlighted as the brokerage firm’s top pick among cement stocks under coverage, with an average dividend yield of 11.9 percent TTM.
Meanwhile, the investment arm of Al Rajhi Bank maintained its “neutral” rating on five cement companies, and reduced the target price of Yamama Cement to SAR 24.
It also reaffirmed an “overweight” recommendation on Yanbu Cement, cutting the stock’s price target to SAR 48.
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Al Rajhi Capital’s Recommendations |
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Company |
Recommendation |
Target price (SAR/share) |
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Previous |
New |
Previous |
New |
|
|
Arabian Cement |
Neutral |
Neutral |
46.5 |
46.5 |
|
Yamama Cement |
Neutral |
Neutral |
26.5 |
24.0 |
|
Saudi Cement |
Neutral |
Neutral |
56.0 |
56.0 |
|
Qassim Cement |
Neutral |
Neutral |
64.0 |
64.0 |
|
Southern Cement |
Neutral |
Neutral |
78.0 |
78.0 |
|
Yanbu Cement |
Overweight |
Overweight |
50.0 |
48.0 |
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