Mikkel Rosenvold
9 weeks ago

Company pays $98 Billion in Dividends - how you can get a taste

This corporate juggernaut just announced heavy dividend payout - and could open for more share sales.
Oil pumps with an overlay depicting rising prices.
Golden Dayz / Shutterstock.com

The state oil company of Saudi Arabia, Saudi Aramco, presented its yearly earnings and dividends on Monday. The company's earnings dropped by 25% in 2023, but dividends were hiked by 30% to a staggering $98 Billion, OilPrice.com reports.

You wouldn't think so, but Saudi Aramco had a really tough 2023 due to falling oil prices and generally lower oil demand. The Saudi Government decided to repeatedly cut oil production to ensure price stability and this naturally hit Saudi Aramco hard.

So why did Aramco boost its dividend payout for 2023? Two reasons. First of all, the Saudi government (the main shareholder) needs the money for its megaprojects such as Neom City. Secondly, Aramco is likely polishing its image and making itself tasty for potential investors ahead of potential share sell-off.

So who is getting the $98 Billion in dividends? Well, mostly the Saudi state, but since the IPO back in 2019 also global shareholders. The IPO consisted of merely 1.7% of shares in Saudi Aramco, but this still amounts to a hefty dividend payout.

We know that the Saudi government is contemplating a new share sale, which would see huge up-front revenues to the Saudi state coffers and tie global investors even more to the Saudi economy.

Saudi Arabia needs funding for its prestige projects and it needs to attract foreign investment. The share sale in Saudi Aramco might just be the way to get about both objectives - and simultaneously opens the company's vast yearly dividends to investors such as you.

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