Safco Gains Most This Year as Board Recommends 6-Riyal Dividend
Safco, as the fertilizer maker is known, gained 4.4 percent to 153.5 riyals, the most since Dec. 8, at 2 p.m. in Riyadh. The stock was the biggest gainer on the benchmark Tadawul All Share Index, which was little changed. The shares have increased 0.8 percent this year compared with a 13 percent jump for the benchmark gauge.
The company, which announced a cash and stock dividend in the year-earlier period, will post a 3 percent decline in second-quarter profit, according to the mean estimate of eight analysts on Bloomberg. The price of urea, which is a source of nitrogen used by farmers to boost crops, has declined 12 percent this year.
“The dividend yield on the stock remains attractive,” Ankit Gupta, Dubai-based equity analyst and assistant vice president of research at NBK Capital, said in an e-mailed comment. “However, the urea market fundamentals remain weak.”
Five analysts have a buy rating on Safco, while ten recommend investors hold the stock and one advises investors to sell, according to data compiled by Bloomberg.
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