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1111

Governance: B

TADAWUL GROUP

Saudi Tadawul Group Holding Co.

137.50 SAR / Share

As of: May 28, 2026

50.0x P/E Ratio Trailing 12 Months

4.7x P/B Ratio Price to Book Value

2.4% Dividend Yield Annual Dividend / Share

16.50B SAR Market Cap Total Valuation

0.73 Beta Systematic Risk Index

26.9% Net Margin Net Profit / Revenue

The Story

A high-margin, infrastructure-critical entity that serves as the exclusive operator of the Saudi capital markets, delivering consistent value through a diversified service model.

Source: Q1 2026 (2026-04-29)

Value Creation +7.2% Excess Return on Capital (Spread between ROIC/ROE and Cost of Capital)

Cash Flow Payback — Estimated years of operating cash flows required to cover Enterprise Value

Performance & Distributions

Dividend Yield Trailing annual dividends paid relative to share price

2.4%

Sustainable Growth Rate Rate at which company can grow internally using reinvested profits

-3.2%

Payout Ratio Percent of net profits distributed as dividends

121.9%

Net Margin Net profit margin generated from total operational revenue

26.9%

ROIC Return on Invested Capital

14.7%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

50.0x

P/B Ratio Market capitalization compared to corporate book value

4.7x

EV / EBITDA Operating multiple reflecting core operational leverage

25.9x

EV / SALES Asset pricing multiple relative to total topline revenue

13.7x

Growth Story

The Group's revenue has shown cyclicality, peaking at 1.45 billion SAR in FY 2024 before normalizing to 1.23 billion SAR TTM. The growth narrative is increasingly defined by diversification into data and technology services, which are becoming vital contributors alongside traditional trading and post-trade segments. However, the 5-year average reinvestment rate of -21.86% indicates that the company is currently prioritizing capital returns to shareholders over heavy internal reinvestment. This results in a sustainable growth rate of -3.2%, suggesting that future expansion will likely rely on external market volumes and strategic acquisitions, such as the full integration of Direct Financial Network Company (DirectFN), rather than organic capital compounding.

Profitability Dynamics

Tadawul Group maintains exceptional profitability, evidenced by a TTM operating margin of 52.8%. The business model is highly capital-efficient, generating a 5-year average ROIC of 14.66%, which comfortably exceeds its WACC of 8.92%. This 5.7% value creation gap demonstrates the Group's ability to generate significant economic profit from its invested capital. While net income normalized to 329.9 million SAR TTM from a high of 620.9 million SAR in FY 2024, the core business remains a robust cash generator. The strategic pivot toward technology services, highlighted by the 220.5 million SAR acquisition of the remaining stake in DirectFN, is intended to bolster these margins by capturing more value from financial content and fintech solutions.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

0.73

Cost of Equity Minimum required rate of return demanded by shareholders

7.5%

WACC Weighted average cost of total debt and equity funding

7.5%

Debt-to-Equity Ratio Proportion of corporate funding financed by debt creditors

3.4%

Risk Factors

The Group's risk profile is anchored by its systemic importance and strong institutional backing, with the Public Investment Fund (PIF) maintaining a 60% controlling stake. Financial leverage is moderate, with total debt of 565.3 million SAR against a market capitalization of 16.8 billion SAR. The primary risks are operational and market-dependent; as a central counterparty through its subsidiary Muqassa, the Group manages 3.84 billion SAR in clearing participant liabilities, requiring a low risk appetite and robust collateral frameworks. Additionally, the Group is sensitive to commission rate fluctuations, where a 1% change in rates is estimated to impact profit by approximately 11.9 million SAR. While geopolitical developments are monitored, core operations have remained resilient through early 2026.

Governance Disclosures

Rating: B

We track 15 key governance and oversight matters for this company in our database.

Significance: 4/10 Info Asymmetry

Board and Key Management Remuneration

For the three-month period ended March 31, 2026, the Group recorded Board of Directors' remuneration of SAR 5,565,803 and key management personnel compensation (salaries and short-term benefits) of SAR 7,875,396.

Mitigating Factors: Remuneration is disclosed in accordance with Saudi Arabian regulatory requirements for joint stock companies.

Significance: 5/10 Asset Risk

Derivative Liabilities and Put Options

The Group has recognized a derivative liability of SAR 48,387,635 related to put options granted to existing equity holders of Gulf Mercantile Exchange Limited (GME). These options allow parties like NYMEX and Eagle Commodities Limited to sell their interests to the Group at fair value during specified future windows.

Mitigating Factors: The Group also holds a call option to purchase an additional 18.4% shareholding in GME at fair value.

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In-Depth Analysis