When Saudi Arabia sold a 1.5% stake in its state-owned oil group Saudi Aramco last December, the company was valued at $1.7 trillion. It was the world’s largest-ever stock market flotation and made Aramco the most valuable company on the planet, eclipsing the likes of Apple (Find out how to buy Apple stock here) and Microsoft. To put such a gargantuan valuation in context, Aramco is now worth more than Exxon Mobil, Total, Royal Dutch Shell, Chevron and BP – the next five most valuable oil companies – combined.
There’s no denying that Aramco’s record-breaking IPO captured the world’s attention, but actually investing in the oil giant isn’t straightforward. In fact, because Aramco (SAOC) is only listed on the Saudi stock exchange, Tadawul, you’ll struggle to invest without some sort of special access. You can, however, opt to trade SAOC via CFDs.
Thinking of investing in Aramco stock? This guide will explain how to buy Aramco stock, take a look at the best stockbrokers and consider the company’s prospects going forward.
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Where to Buy Aramco Stock
Because the company is only listed on the Saudi stock exchange, foreign investors aren’t able to buy Aramco stock. However, online trading platforms like eToro offer CFD trading for Aramco, so you can speculate on the company’s price fluctuations. Here are the top brokers on which you can trade Aramco stocks in the form of CFDs.
1. eToro – Market Leading Broker Built on Social Trading Innovation
eToro is an innovative social trading platform that offers users the chance to trade over 800 stocks as CFDs, including Aramco stock. It's famous for its CopyTrader tool, which allows you to follow and mimic the positions of high performing investors.
This means you can speculate on Aramco’s price fluctuations without actually buying stock. With CFD trading you can open short positions, meaning you can bet on a stock dropping in value as well as rising. CFD trading also gives you the option of using leverage, allowing you to boost the value of a trade with capital borrowed from the broker.
You can open an account with as little as $200, so dipping your toe in and giving CFD trading a go is relatively affordable. You can also trade Aramco CFDs with no commission, and the spreads are competitive.
You can get to grips with the eToro platform for free courtesy of a demo option that gives you $100,000 in practice funds to play with, which is a great way to build your knowledge and experience before risking any real money.
- 800+ stocks to buy outright or trade as CFDs
- Beginner-friendly stock trading platform
- 0% commission on stock trading
- $5,000 account minimum for CopyPortfolios
2. Fidelity – US Broker Offering Access to Saudi Market
US users are slightly more restricted when it comes to investing in Aramco stock, although this is possible at Fidelity.
Fidelity offers users the opportunity to invest in Saudi Aramco via the iShares MCSI Saudi Arabia ETF. This is the only single-country ETF for Saudi stocks and is provided by iShares, a family of ETFs managed by BlackRock, the world's largest asset manager.
This ETF tracks the investment results of the MSCI Saudi Arabia IMI 25/50 Index, which is composed of a group of large, medium and smaller Saudi companies, offering US users access to a market that is otherwise mostly shut off for foreign investors.
If you're never invested in an ETF before, iShares offers a wealth of educational resources and insights to help you build up your knowledge, and you can invest commission-free.
- No commission on ETFs
- Educational resources and insights
- High mutual fund fees and financing rates
Should I Buy Aramco Stock? Points to Consider
Looking to invest in Aramco, or similar stocks such as BP stock? We always recommend researching the company fundamentals and considering historic price movements and forecasts before you invest.
Aramco business model and share price history
Officially known as the Saudi Arabian Oil Company, Saudi Aramco is the world’s biggest oil producer, most profitable business and, since its blockbuster IPO last December, the most valuable company on the planet.
Aramco, which is controlled by the Saudi state, went public in December 2019, selling off a 1.5% stake for $25.6 billion in an IPO that valued the company at $1.7 trillion. After two days of trading the value leaped up even higher, making Aramco the world’s first $2 trillion company.
The Aramco IPO is linked Saudi Crown Prince Mohammad bin Salman’s Vision 2030 plan, which seeks to reduce the country’s dependence on oil by diversifying its economy. To do this, Saudi Arabia needs a multi-trillion-dollar mega-fund. The Aramco float is part of this fundraising strategy.
As impressive as Aramco’s IPO undoubtedly was, the company finds itself in the midst of a challenging, geopolitically fraught oil market. Indeed, the first few months of 2020 have seen a collapse in oil prices that sent SAOC shares into freefall.
This came about because Saudi Arabia ramped up its oil output, and lowered its price, in response to a spat with Russia and the collapse of the OPEC deal after three years of cooperation. The situation has since been stabilized thanks to a new OPEC deal that will see member states cut output to offset a global slump in demand.
At the start of May, the oil market was showing signs of a revival and Aramco was up 2.3% as Saudi Arabia’s stock market began to outperform the region. The situation remains tense, however, and investors will be conscious that Aramco share prices are highly vulnerable to prevailing geopolitical winds.
Aramco stock dividend information
Saudi Aramco has initially pledged an annual dividend of $75 billion for the first five years. The first payment, for Q4 2019, was made to shareholders on March 31.
Aramco stock forecast and prediction
As SAOC is only listed on the Saudi exchange therefore not available to most foreign investors, analyst forecasts are hard to come by. Overall, the outlook seems to be uncertain, with oil demand down and geopolitical events always liable to impact Aramco share prices. All things considered, we’d err towards a Hold rating for SAOC.
How to Trade Aramco Stock on eToro
It’s quick and easy to trade Aramco CFDs at our recommended broker, eToro. Assuming you’ve signed up and funded your broker account, follow these simple steps to trade Aramco stock.
Step 1: Search for Aramco Stock
Look up Aramco by typing the ticker symbol SAOC into the search box.
Step 2: Click on trade
Click Trade in the top right corner of the Aramco page.
Step 3: Specify ‘Buy’
To trade Aramco CFDs, set your leverage amount, Stop loss and Take profit order limits, then click ‘Set Order’.
Investing in Aramco Shares – Final Thoughts
It’s hard to analyze Aramco’s prospects given that the company is so closely linked to the fortunes of the Saudi state. While the country and Aramco are both focused on diversifying away from oil dependency, that target remains a distant one.
In the meantime, the country’s standing in the global oil market remains strong thanks to its enormous oil reserves. Indeed, Saudi could strengthen its position as oil production growth slows elsewhere. This doesn’t necessarily make Aramco a good investment, however. Geopolitical risk and questionable corporate governance are factors to be considered.
If you do want to trade Aramco stock, simply sign up to one of our recommended online stockbrokers. Go for eToro if you live outside the US, and if you do live in the States we suggest you choose Stash Invest.
eToro : Best stockbroker for non U.S. countries
- Social and copy trading available
- CySEC & FCA regulated
- Buy stocks commission-free (other fees may apply)
Fidelity : Invest in Saudi Market ETFs
- US-friendly broker
- Invest in Saudi market via ETFs
- 0% commission on stocks and ETFs
- Educational resources and insights
Should I buy Aramco stock or wait?
Access to Aramco stock is limited by its Tadawul listing. For the foreseeable future most investors will only be able to trade SAOC.
What are the fees when buying Aramco stock?
Currently, foreign investors can only invest in Aramco stock via CFDs and ETFs, so the fees depend on the broker you choose. Both eToro and Fidelity offer 0% commission trading, but you'll have to consider fees like spreads, overnight fees and potential withdrawal fees.
Is there an Aramco stock price prediction?
In January, analysts from Morgan Stanley gave Aramco a price target of 28.10 riyals (the current price is 31.65 riyals), rating it Underweight.
What does the Aramco stock dividend pay?
Aramco’s first dividend, for Q4 of 2019, was 0.0738 riyals per share.