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4019

Governance: D

SMC HEALTHCARE

Specialized Medical Co.

16.71 SAR / Share

As of: May 28, 2026

15.5x P/E Ratio Trailing 12 Months

4.1x P/B Ratio Price to Book Value

4.8% Dividend Yield Annual Dividend / Share

4.18B SAR Market Cap Total Valuation

0.94 Beta Systematic Risk Index

17.4% Net Margin Net Profit / Revenue

The Story

SMC Healthcare operates as a steadily growing, highly profitable medical services provider in Saudi Arabia, generating consistent returns above its cost of capital.

Source: Q1 2026 (2026-05-07)

Value Creation +2.0% 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

4.8%

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

+2.5%

Payout Ratio Percent of net profits distributed as dividends

74.3%

Net Margin Net profit margin generated from total operational revenue

17.4%

ROIC Return on Invested Capital

10.0%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

15.5x

P/B Ratio Market capitalization compared to corporate book value

4.1x

EV / EBITDA Operating multiple reflecting core operational leverage

14.4x

EV / SALES Asset pricing multiple relative to total topline revenue

3.2x

Growth Story

SMC Healthcare's growth story resembles a steadily expanding medical campus. Revenue has expanded from SAR 1,053,123,670 in FY 2021 to SAR 1,538,460,468 in FY 2025, reaching a TTM level of SAR 1,550,739,047. This steady expansion is supported by a 5-year average reinvestment rate of 24.57%. Combined with a 5-year average ROIC of 10.04%, the company's sustainable growth rate stands at 2.47%. This growth is physically manifested in ongoing capital commitments of SAR 100,517,274 for projects SMC 3 and SMC 4, indicating that the company is actively building out its long-term capacity to meet the Kingdom's rising healthcare demands.

Profitability Dynamics

The company's profitability operates like a high-precision surgical suite, maximizing efficiency and minimizing waste. SMC Healthcare demonstrates solid value creation, with a 5-year average ROIC of 10.04% comfortably exceeding its WACC of 8.01%, yielding a positive spread of 2.04%. This value creation is driven by healthy operating efficiency, as evidenced by a TTM operating margin of 15.72% and a profit margin of 17.36%, with TTM EBIT reaching SAR 243,759,202. The company's core medical services segment remains the primary engine of profitability, generating SAR 74,831,398 in gross profit on SAR 310,133,627 in revenue for the three months ended March 31, 2026, while pharmacies and other services contributed SAR 16,136,184 in gross profit. This profitability supports substantial cash distributions, including an exceptional SAR 200,000,000 dividend paid in early 2026 and a proposed SAR 80,000,000 dividend for fiscal 2025.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

0.94

Cost of Equity Minimum required rate of return demanded by shareholders

8.4%

WACC Weighted average cost of total debt and equity funding

8.0%

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

19.8%

Risk Factors

SMC Healthcare manages its risk profile like a balanced life-support system, carefully monitoring vital signs to ensure stability. The company's risk profile is characterized by moderate market sensitivity, with a relevered beta of 0.94. To fund its operations and expansion, SMC Healthcare carries SAR 827,114,623 in total debt, which includes SAR 267,074,018 in short-term Shariah-compliant working capital facilities and SAR 271,938,776 in long-term loans for projects under construction, alongside lease liabilities of SAR 288,101,829. While the company maintains a solid current working capital of SAR 371,007,291, it faces credit risks associated with its trade receivables, which stood at SAR 475,915,112 gross, offset by an expected credit loss allowance of SAR 42,450,524. Additionally, the company is exposed to regulatory and tax risks, with outstanding final Zakat assessments for the years 2019 to 2023 and 2025 still pending.

Governance Disclosures

Rating: D

We track 14 key governance and oversight matters for this company in our database.

Significance: 4/10 Tunneling

Related-Party Lease and Rent Transactions

The company made rent and lease liabilities payments to related parties, including entities owned by shareholders or their close family members, amounting to SAR 4,882,923 for the period ended March 31, 2026, and SAR 4,059,223 for the period ended March 31, 2025.

Mitigating Factors: Transactions were conducted in the ordinary course of business in accordance with terms approved by the Group's management.

Significance: 6/10 Tunneling