Saudi Aramco, the world's largest oil producer, already pays out a dividend that surpasses the payouts of the next five largest global payers combined. Bloomberg Intelligence forecasts that the company's payouts to the Saudi government and other investors could increase by over $20 billion in 2023. This extra payment alone is equivalent to the estimated annual dividend of Microsoft Corp.
Although Apple Inc. may have a higher market cap at $2.7 trillion, Saudi Aramco's shareholder payouts, excluding buybacks, dwarf all others. The additional payout means that Aramco shareholders will be monitoring oil prices more closely than ever.
The Saudi Arabian government directly owns 90% of the shares, with an additional 8% held by the kingdom's sovereign wealth fund. Morgan Stanley predicts that the increase could boost Aramco's dividend stream by 10% to 20% at current oil prices, while RBC Capital Markets LLC forecasts an incremental payout of $12 billion to $18 billion.
However, Brent crude has fallen approximately 40% from its March 2022 peak, and the selloff has intensified in recent weeks due to concerns about an economic slowdown that may affect demand.
In summary, Saudi Aramco's dividend increase is expected to widen its lead among global payers, with the company paying out more than the next five largest payers combined. This extra payment also highlights the importance of oil prices to Aramco shareholders. Despite concerns about falling oil prices due to the economic slowdown, analysts predict that the increase will boost Aramco's dividend stream by a significant amount.
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