Al-Rajhi Company for Cooperative Insurance “Al Rajhi Takaful” (8230), achieved the best performance in the Saudi stock market this year, with an increase of up to 184.5% over the past 8 months.
Remarkable Performance
Asharq Business noted that “Al Rajhi Takaful” topped the list of “best-performing” stocks on the local stock market “Tadawul” from the beginning of the year until the end of August.
Last month, the stock closed at SAR 202, with about 5 companies doubling their share prices during that period.
So what
Financial analyst Marie Salem at “Asharq” stated that the positive performance of “Al Rajhi Takaful” shares began in 2022 when they recorded a 15% increase.
The increases in 2023 approached 100%, and now they are surging even more.
The stock’s jumps this year began in February, following 353% year-on-year growth in the company’s net profits from the previous year.
This created “a kind of positivity” among investors.
However, Marie believes there is concern about a potential stock performance slowdown.
This is because it trades at a price-to-earnings ratio of 51 times, higher than its peers in the local and regional markets.
It is also higher than the insurance sector’s average price-to-earnings ratio, approximately 21 times.
The stock saw a decline of about 7% last month alone.
Some context
The “strong performance” of the company’s shares led to its promotion in global stock indices.
FTSE Russell upgraded “Al Rajhi Takaful” from the small-cap index to the mid-cap index.
MSCI also added the company’s shares to its global standard index, excluding it from the small-cap index.
On the other hand, Saad Althagfan, a board member of the Saudi Economic Association (SEA), explained that “Al Rajhi Takaful” shares have been on the rise since last year.
This is due to high revenues and good profits, making it “the third-largest company” in the insurance sector in terms of profits.
The company’s net profits increased by 18% year-on-year during the period from April to June 2024, amounting to approximately 90 million riyals.
Its net profits in the first half of this year jumped to around SAR 201 million, an annual increase of nearly 47%.
It is worth noting that “Al Rajhi Takaful” meets a wide range of insurance needs in the Kingdom.
These include vehicles, health insurance, property, and personal injury insurance.
The company was also one of the first providers of comprehensive protection and savings solutions in the country, according to its website.
Finally, “Al Rajhi Bank” owns 35% of “Al Rajhi Takaful” shares.
