How Much Will Aramco Stock Be?

Aramco stockSaudi Aramco has been considering an initial public offering (IPO) since 2015, when Mohammad bin Salman surprised the world by announcing it during an interview.

That has investors eager to get a slice of the world's most profitable oil company and one of the biggest companies on the planet.

And with a potential valuation of $2 trillion, even a 5% stock offering could be enough to shatter records.

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Those sorts of numbers mean investors already want to know the price of Aramco stock once it goes public.

We won't know the Aramco stock price until the company is much closer to going public. It's unlikely its underwriters will release a share price estimate until a week before the official IPO, which might not happen until 2019.

But there's better news...

Investors don't have to wait around for the IPO to start making money off of Aramco.

Here's why - and how you can do it...

How Much Will Aramco Stock Be Worth?

While we won't know the exact Aramco share price until it's ready to IPO, we can deduce some interesting facts about the stock.

Bloomberg uncovered some key information that may help investors understand how much the company is worth.

During the first half of 2017, Aramco made $33.8 billion in income, blowing Exxon Mobil Corp.'s (NYSE: XOM) $7.1 billion for the same period out of the water.

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Bloomberg's Matt Levine extrapolated from Exxon's total income of $19.7 billion for all of 2017 to estimate that Aramco's 2017 income could have come in around $90 billion. He reasons that figure is correct, and as Aramco is valued at $2 trillion, it would place Saudi Aramco's price/earnings (P/E) ratio at around 22.

That's roughly the same P/E ratio as Exxon, which means Aramco's valuation might be accurate.

We simply won't know the Saudi Aramco share price until the company releases the number of shares it's willing to sell and how much it is pricing them for.

But the real money being made from the Aramco IPO won't be from the stock sale...

How to Profit from the Saudi Aramco IPO

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Money Morning Global Energy Strategist Dr. Kent Moors believes that the real story here is that the IPO is designed to raise cash for the Saudi Arabian government.

Dr. Moors has spent three decades advising countries and companies worldwide about energy policy, so when he speaks, we listen.

Dr. Moors says the Saudi government may be planning to use its $2 trillion to diversify away from its oil economy.

The IPO will help Saudi Arabia create the world's largest sovereign wealth fund, and it'll use that fund to invest in assets across the world.

If you know where this money is going, then you can profit by getting in early.

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