Al Rajhi Bank Stock (1120) — Buy, Hold or Wait? Complete Investment Guide 2026

Investors across Saudi Arabia, the UAE, Qatar, Kuwait, Bahrain, and Oman consistently search for Al Rajhi Bank stock (1120) as one of the most prominent equities on the Saudi market — the world's largest Islamic bank by assets, and one of the most liquid and trusted stocks on Tadawul. This guide answers the ten most important questions investors ask before making a buy decision, based on the latest available financial data.

Disclaimer: This article is for educational and research purposes only and does not constitute investment advice. Trading in stocks involves risk of capital loss. Please consult a licensed financial advisor before making any investment decision.

Al Rajhi Bank at a Glance — Key Numbers

For live prices and the latest technical analysis, follow the Al Rajhi 1120 stock page on FxNewsToday.

1. Is Al Rajhi Stock a Good Buy Now for Medium to Long-Term Investors?

The short answer: yes — with clear conditions. Al Rajhi Bank combines two qualities that rarely appear in the same stock: strong earnings growth (+31% in Q2 2025) and deep institutional stability as the world's largest Islamic bank. However, a P/E of ~16x means the stock is not cheap in the traditional sense — you are paying a premium for quality and growth.

For medium-term investors (1–3 years): the stock is suitable if your primary goal is capital appreciation with periodic dividends. For long-term investors (5+ years): it is highly suitable — original IPO subscribers since 1988 have seen their capital multiply 156 times, and digital growth with loan expansion (+16% annually) support continued momentum. The only caveat: do not enter with capital you cannot leave invested for 12–18 months should a market correction occur.

Follow the latest Al Rajhi stock analysis and Al Rajhi Bank news to stay current on any developments affecting the buy decision.

2. Best Way to Analyse Al Rajhi Stock Before a Buy Decision

Sound analysis combines three levels:

• Fundamental Analysis: Review the P/E (~16x) against the sector average, EPS (SAR 6.16), loan growth rate (+16%), and net interest margin. Sustained earnings growth with stable credit quality is the key signal.
• Technical Analysis: Identify major support and resistance levels, and monitor RSI and MACD indicators. Entering at a strong technical support level significantly reduces entry risk.
• Dividend Analysis: Calculate the dividend yield by dividing the total annual dividend by the current share price — currently ~2.56%, below the top 25% of Saudi market dividend payers (4.79%), but capital growth compensates for this gap.

Follow Saudi stock analysis regularly for the broader market context before making your decision.

3. Is Al Rajhi Stock a Good Choice for a Dividend Income Portfolio?

Here, honesty matters: if dividend income is your primary goal, Al Rajhi is not the optimal standalone choice — a yield of 2.56% trails other Saudi market stocks like STC (10.04%) and Saudi Electricity. Where it excels is in combining dividends and capital growth together.

The smarter strategy for an income portfolio: allocate 20–25% to Al Rajhi for sustained capital growth with regular semi-annual dividends, and complement it with high-yield stocks (STC, Saudi Electricity) to balance immediate income with long-term growth. Al Rajhi's dividend history:

4. How to Compare Al Rajhi with Other Saudi Bank Stocks

Comparison summary: Al Rajhi is the first choice for institutional quality and growth — but SNB outperforms on valuation attractiveness (P/E 9.4x). If you want best value, SNB; if you want best quality and growth, Al Rajhi. Follow live Saudi stock prices for real-time comparison.

5. Key Financial Indicators to Review Before Buying Al Rajhi

• P/E Ratio (~16x): Compare to sector average. The closer it gets to 12–14x, the better the buying opportunity.
• EPS (SAR 6.16): Watch for quarter-on-quarter growth — consistent growth is the key health signal.
• P/B Ratio (2.82x): Reflects the premium the market pays for Al Rajhi's assets — elevated but justified by the expected return on equity.
• Return on Equity (ROE): Expected to reach 20.4% within 3 years — exceptional by regional banking standards.
• Loan Growth (+16% annually): Reflects genuine business expansion, not just margin improvement.
• Payout Ratio (42.71%): Reasonable — the bank retains enough earnings to fund future growth.
• Asset Quality and Capital Adequacy: Review NPL ratio and capital adequacy ratio in quarterly reports via the Al Rajhi news page.

6. How to Calculate Expected Return from Al Rajhi Dividends

The calculation is straightforward. Dividend Yield = Total Annual Dividends ÷ Current Share Price × 100

Practical example: If Al Rajhi distributed SAR 2.71 in 2024 and the share price is SAR 94:

• Dividend Yield = 2.71 ÷ 94 × 100 = ~2.88%
• On a SAR 50,000 investment: expect approximately SAR 1,440 per year in dividend income
• Add the expected capital growth (+11.2% annual earnings growth) for the complete total return picture

Key tip: Do not judge Al Rajhi's attractiveness by dividend yield alone — total return (dividends + capital appreciation) is the right metric for this stock. Follow the Al Rajhi stock page for the latest dividend data.

7. Is Al Rajhi Suitable for Defensive Investing?

Yes — but in a specific sense. Al Rajhi is relatively defensive compared to technology, entertainment, or construction stocks, but not defensive in the classical sense (like utilities). In periods of market stress:

• Historically lower volatility vs. the broader market makes it a suitable shelter
• Regular semi-annual dividends provide cash flow even in declining markets
• Its full Islamic banking model makes it a comfortable choice for compliant investors without additional screening
• Its correlation with oil prices and the Saudi economy remains a risk factor that cannot be ignored

For regular updates on the Saudi banking sector, follow Saudi stock analysis on FxNewsToday.

8. Should You Buy Al Rajhi in One Tranche or Multiple Tranches?

For medium and long-term investors: buying in tranches (Dollar Cost Averaging) is the smarter approach in most cases. Here is why:

• The Saudi market is influenced by oil prices and regional policies — creating periodic better-priced entry opportunities
• Buying in 3–4 tranches spread over 3–6 months lowers average cost and reduces the risk of entering at a local peak
• Start with 40–50% of your target position at the first technically compelling entry, and keep the rest for adding on dips
• If you have strong conviction and a 5+ year horizon, a full entry is acceptable — provided you can tolerate volatility without panic-selling

9. What Do Analysts Say About Al Rajhi Stock?

Major analyst views reflect a positive outlook with valuation caveats:

• Goldman Sachs: Initiated coverage with a Buy rating — a confidence signal from one of the world's most prominent investment banks
• Jefferies: Initiated with Hold, citing limited upside from current levels
• Al Jazira Capital: Recommended "increasing positions", noting results significantly better than management guidance on loan growth and net interest margin
• Earnings outlook: +11.2% annual profit growth — faster than the Saudi market's expected 6% annually
• ROE forecast: Expected to reach 20.4% within 3 years — among the highest in the regional banking sector

Follow the latest Al Rajhi analysis and news for real-time analyst updates.

10. Best Investment Strategy for a Beginner Seeking Regular Income

If you are a beginner looking for regular income from Al Rajhi stock, here is a practical step-by-step plan:

• Step 1 — Determine the right capital: Only invest what you can lock up for 2–3 years. Suggested minimum to start: SAR 10,000–20,000.
• Step 2 — Enter in tranches: Split your capital across 3 purchases over 3–4 months to lower your average cost.
• Step 3 — Record dividend dates: Al Rajhi typically distributes twice a year (March/April and August/September). Note the ex-dividend date and ensure you hold shares before it.
• Step 4 — Reinvest dividends: Reinvesting dividends to buy additional shares activates compounding and multiplies total return over the long term.
• Step 5 — Monitor calmly: Do not react to every daily move. Set a price alert at -10% as a review threshold and +20% as a partial exit evaluation point.

Conclusion: Should You Buy Al Rajhi Stock?

Al Rajhi Bank is the clear first choice for anyone seeking a Saudi bank stock with high institutional quality, sustained earnings growth, and regular semi-annual dividends. The current valuation (~16x P/E) makes it suitable for medium and long-term investors — not for speculators hunting a bargain. The best entry points are during broad market corrections or following temporarily disappointing quarterly earnings releases.

To stay consistently informed on the stock, make these your key references:

• Al Rajhi 1120 live stock price
• Latest Al Rajhi stock analysis
• Latest Al Rajhi Bank news
• Saudi stock analysis
• Live Saudi stock prices

Disclaimer: This article is for educational and research purposes only and does not constitute a formal investment recommendation. Past stock performance does not guarantee future results. Trading in stocks involves risk of capital loss. Please consult a licensed financial advisor before any investment decision.