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Saudi Arabian Oil CoSAU:2222 +0.15%82 WACC % is 7.42% as of Jul. 18, 2026, which is 5% above its 10-year median of 7.07. GuruFocus rates SAU:2222 with a GF Score™ of 82/100 and a GF Value™ of ﷼27.01 (Fairly Valued). The stock has 5 warning signs investors should review. Among 1,036 Oil & Gas companies, Saudi Arabian Oil Co ranks worse than 50.48% on this metric.
As of today (2026-07-18), Saudi Arabian Oil Co's weighted average cost of capital is 7.42%%. Saudi Arabian Oil Co's ROIC % is 18.99% (calculated using TTM income statement data).
Saudi Arabian Oil Co generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
For a comprehensive WACC calculation, please access the WACC Calculator.
Saudi Arabian Oil Co (SAU:2222) WACC % Explanation
Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Saudi Arabian Oil Co's weighted average cost of capital is 7.42%%. Saudi Arabian Oil Co's ROIC % is 18.99% (calculated using TTM income statement data).
Saudi Arabian Oil Co generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Be Aware
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Oil & Gas Integrated subindustry, Saudi Arabian Oil Co's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Saudi Arabian Oil Co WACC % vs Oil & Gas Industry
For the Oil & Gas industry and Energy sector, Saudi Arabian Oil Co's WACC % distribution charts can be found below:
* The bar in red indicates where Saudi Arabian Oil Co's WACC % falls into.
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
WACC
=
E
/
(E + D)
*
Cost of Equity
+
D
/
(E + D)
*
Cost of Debt
*
(1 - Tax Rate)
1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, Saudi Arabian Oil Co's market capitalization (E) is ﷼6454089.432 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Mar. 2026, Saudi Arabian Oil Co's latest one-year quarterly average Book Value of Debt (D) is ﷼354835.2 Mil.
a) weight of equity = E / (E + D) = 6454089.432 / (6454089.432 + 354835.2) = 0.9479
b) weight of debt = D / (E + D) = 354835.2 / (6454089.432 + 354835.2) = 0.0521
2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 4.551%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. Saudi Arabian Oil Co's beta is 0.5280.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 4.551% + 0.5280 * 6% = 7.719%
3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
As of Mar. 2026, Saudi Arabian Oil Co's interest expense (positive number) was ﷼13312 Mil. Its total Book Value of Debt (D) is ﷼354835.2 Mil.
Cost of Debt = 13312 / 354835.2 = 3.7516%.
4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = 359969 / 734644 = 49%.
Saudi Arabian Oil Co's Weighted Average Cost Of Capital (WACC) for Today is calculated as:
WACC
=
E / (E + D)
*
Cost of Equity
+
D / (E + D)
*
Cost of Debt
*
(1 - Tax Rate)
=
0.9479
*
7.719%
+
0.0521
*
3.7516%
*
(1 - 49%)
=
7.42%
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Saudi Arabian Oil Co (SAU:2222) has a WACC % of 7.42% as of Jul. 18, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Saudi Arabian Oil Co and its competitors. This is near median its historical median of 7.07. Over the past decade, Saudi Arabian Oil Co's WACC % has ranged from 1.76 to 7.79. According to the industry distribution chart, Saudi Arabian Oil Co ranks #523 out of 1036 companies in the Oil & Gas industry, placing it in the top 50.5%.
Is Saudi Arabian Oil Co's WACC % too high?
Saudi Arabian Oil Co's current WACC % of 7.42% is near median its 10-year median of 7.07. Over the past 10 years, this metric has ranged from a low of 1.76 to a high of 7.79. The Oil & Gas industry median WACC % is 7.37. Saudi Arabian Oil Co's value of 7.42% is 0.7% above this industry median. Based on the distribution chart, Saudi Arabian Oil Co ranks #523 out of 1036 companies in the Oil & Gas industry, which is below the industry midpoint. Overall, Saudi Arabian Oil Co has a GF Score™ of 82/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Saudi Arabian Oil Co's WACC % compare to XOM and CVX?
According to the Oil & Gas industry distribution chart, Saudi Arabian Oil Co ranks #523 out of 1036 companies for WACC %. This places Saudi Arabian Oil Co in the lower half of its industry. The industry median WACC % is 7.37. Saudi Arabian Oil Co's value of 7.42% is 0.7% above this benchmark. Historically, Saudi Arabian Oil Co's own WACC % has ranged from 1.76 to 7.79 over the past decade. While the company's 10-year median is 7.07 vs. the industry median of 7.37, Saudi Arabian Oil Co has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good WACC % for an Oil & Gas company?
The median WACC % among Oil & Gas companies is 7.37, based on 1,036 companies in the industry. Companies in the top quartile (top 25%) have a WACC % significantly above this median, while those in the bottom quartile fall well below. However, WACC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Saudi Arabian Oil Co's current WACC % of 7.42% is 0.7% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high WACC % mean?
A high WACC % can signal that a stock is expensive relative to its fundamentals. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Saudi Arabian Oil Co and its competitors. For the Oil & Gas industry, the median WACC % is 7.37 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Saudi Arabian Oil Co's current WACC % is 7.42%, which is near median its own 10-year median of 7.07. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Saudi Arabian Oil Co stock overvalued right now?
Based on GuruFocus' analysis, Saudi Arabian Oil Co (SAU:2222) is currently considered Fairly Valued. The stock's GF Value™ is ﷼27.01, compared to a current price of ﷼26.68 — trading 1.2% below its estimated fair value. The current WACC % is 7.42%, which is near median its 10-year median of 7.07 and 0.7% above the Oil & Gas industry median of 7.37. Saudi Arabian Oil Co's overall GF Score™ is 82/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is WACC % calculated?
WACC % is calculated from a company's financial statements. For Saudi Arabian Oil Co (SAU:2222), the current WACC % is 7.42% as of Jul. 18, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Saudi Arabian Oil Co (SAU:2222) Overvalued in 2026?
Based on GuruFocus' analysis, Saudi Arabian Oil Co stock appears to be undervalued.
The current stock price of ﷼26.68 is trading 1.2% below its estimated GF Value™ of ﷼27.01.
GuruFocus considers Saudi Arabian Oil Co to be Fairly Valued.
Key valuation signals for SAU:2222:
WACC %: 7.42% (near median its 10-year median of 7.07)
GF Value™: ﷼27.01 vs. price of ﷼26.68 (1.2% below fair value)
Industry Position: 0.7% above the Oil & Gas median (#523 of 1036)
No single metric tells the full story. See the SAU:2222 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Saudi Aramco is the national oil company of Saudi Arabia and holds the exclusive right to explore for, produce, and refine the country's hydrocarbons. It is the largest oil and gas producer in the world with a production volume of 12.9 mmboe/d in 2025, including 10.7 mmboe/d of liquids. Its 4.2 mmb/d in net refining capacity makes it the world's fourth-largest refiner. It also owns 59.3 million metric tons of chemical manufacturing capacity, placing it among the top five global chemical companies.
82GF Score
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