10 best Saudi stocks for dividends, picked by Aljazira Capital

With most Saudi Arabian stocks trading near their fair value, investors would do best to target companies set to pay the most in dividends in 2017, according to the equities team at Aljazira Capital.The Riyadh-based securities firm selected 10 stocks to recommend for dividend investors, after assessing these companies’ cash position, spending plans, debt profile and the latest corporate and industry developments. The team of analysts is led by acting head of research Talha Nazar, whose recommendations outperformed the average among his Saudi Arabian peers in the past year.The following are Aljazira’s selections, along with the reasons for their inclusion in the list prepared for clients:Saudi Telecom Co n Tower-sharing deals likely to provide operational and capital expenditure savings n Regulator’s decision to allow companies to offer wider range of services will add to competition; however, ongoing challenges at competitors Zain Saudi and Etihad Etisalat Co – known as Mobily – are positives for Saudi TelecomYanbu National Petrochemical n Positive outlook on global ethylene and propylene demandn Increased sales and lower cost of feedstock support profitability Saudi Vitrified Clay Pipe Co n Well-placed to gain from growing Saudi Arabian housing industryn Beneficiary of National Transformation Plan implementationSaudi Airlines Catering Co n Competitive advantage and prospects linked to fleet expansionn Scope to add to service contracts with regional airlines, including Oman AirAdvanced Petrochemical Co n Strong cash positionn Recovery in crude oil to drive valuationSaudi Cement Co n Measures to streamline plant operationsn Strong presence in eastern regionSouthern Province Cement Co n Diversified plant locations – Jazan, Bisha and Tahaman Access to the lucrative western region, where demand is projected to outpace other parts of Saudi ArabiaYanbu Cement Co n Implementation of waste-heat recovery system to achieve cost savingsn Recovery in demand in western region to drive valuationQassim Cement Co n Well-placed for recovery in demand from central region n Strong dividend payout historySaudi Ground Services Co n Beneficiary of rapid airports expansion n Strong long-term relationship with Saudi Arabia AirlinesTower-sharing deals are likely to provide operational and capital expenditure savings for STC