← Market Overview

4100

Governance: C

MCDC

Makkah Construction and Development Co.

89.75 SAR / Share

As of: May 28, 2026

36.9x P/E Ratio Trailing 12 Months

4.4x P/B Ratio Price to Book Value

1.7% Dividend Yield Annual Dividend / Share

17.95B SAR Market Cap Total Valuation

0.67 Beta Systematic Risk Index

44.7% Net Margin Net Profit / Revenue

The Story

MCDC leverages its prime real estate footprint adjacent to Al Masjid Al Haram to capture high-margin hospitality and commercial rental revenues, though its heavy capital reinvestment currently outpaces its historical return profile.

Source: Q1 2026 (2026-05-19)

Value Creation -0.9% 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

1.7%

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

+10.0%

Payout Ratio Percent of net profits distributed as dividends

61.7%

Net Margin Net profit margin generated from total operational revenue

44.7%

ROIC Return on Invested Capital

5.9%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

36.9x

P/B Ratio Market capitalization compared to corporate book value

4.4x

EV / EBITDA Operating multiple reflecting core operational leverage

40.4x

EV / SALES Asset pricing multiple relative to total topline revenue

17.3x

Growth Story

Under the banner of 'The Expanding Courtyard', MCDC's revenue trajectory shows robust expansion, with TTM revenue reaching 1,088,277,258 SAR, up from 1,072,462,567 SAR in FY 2025 and 836,040,336 SAR in FY 2024. This top-line momentum is supported by a high 5-year average reinvestment rate of 169.53%, which translates to a sustainable growth rate of 10.05% when paired with its historical return on capital. A major driver of this growth is the company's aggressive capital deployment, highlighted by the acquisition of a prime 976 million SAR plot of land in Makkah in late 2025 for mixed-use hotel and commercial development. This strategic expansion, alongside its 1.21 billion SAR equity stake in Jabal Omar Development Company and investments in real estate associates like First Avenue and Jorhum, positions MCDC to capture long-term demand from the expanding Hajj and Umrah tourism sectors.

Profitability Dynamics

Framed as 'The High-Yield Oasis', MCDC exhibits exceptional operating efficiency, boasting a TTM operating margin of 40.16% and a net profit margin of 44.67%, driven by high-margin commercial rentals and hospitality operations. TTM EBIT stands at 437,047,793 SAR, while net income reached 486,185,941 SAR. Despite these strong margins, the company's 5-year average ROIC of 5.93% falls slightly short of its WACC of 6.87%, resulting in a negative value creation gap of -0.95%. This gap reflects the capital-intensive nature of its prime real estate assets, which require massive upfront investments before generating stabilized cash flows. However, the underlying value of its portfolio is immense; while the net book value of its investment properties is recorded at 207,487,246 SAR, their appraised market valuation stands at a staggering 4.396 billion SAR, indicating substantial unrecognized asset appreciation that supports its long-term wealth creation potential.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

0.67

Cost of Equity Minimum required rate of return demanded by shareholders

7.2%

WACC Weighted average cost of total debt and equity funding

6.9%

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

5.4%

Risk Factors

Operating under 'The Shifting Sands of Seasonality', MCDC's risk profile is characterized by low market sensitivity, with a relevered beta of 0.6712, but it faces notable operational and financial headwinds. The business is highly seasonal, with revenues heavily concentrated around the Hajj and Umrah periods. Financially, the company has recently increased its leverage, carrying 978,222,705 SAR in total debt against a cash balance of 49,179,392 SAR. This debt includes an 880 million SAR Shariah-compliant bridge facility from Aljazira Bank secured by government Sukuk to fund its massive land acquisition. Additionally, MCDC faces regulatory and legal exposures, including 18 million SAR in disputed Zakat assessments with ZATCA and a legal dispute regarding a shortfall of 1.198 million shares in its Jabal Omar investment, though legal advisors maintain a strong position on the latter.

Governance Disclosures

Rating: C

We track 3 key governance and oversight matters for this company in our database.

Significance: 7/10 Asset Risk

Share Shortfall and Property Dispute with Jabal Omar Development Company

Jabal Omar Development Company (JODC) confirmed a shortfall of 1,198,571 shares compared to MCDC's records due to land area measurement differences and a legal dispute over property submitted as in-kind capital (affecting 578,362 shares). Additionally, 8,509,144 shares represent in-kind capital for land titles where transfer has not been finalized, restricting MCDC's ability to access its rights (such as selling them) until completion.

Mitigating Factors: A final and conclusive judgment was issued in favor of MCDC regarding the property dispute of 578,362 shares, and external legal counsel advised that JODC may not unilaterally reduce MCDC's shares or valuation.

Significance: 8/10 Info Asymmetry

Related-Party Transactions and Financing with Aljazira Bank

MCDC purchased government Sukuk valued at approximately SAR 927 million through Aljazira Capital, a subsidiary of Aljazira Bank, in December 2025. MCDC also obtained Shariah-compliant bridge financing of SAR 880 million from Bank AlJazira, secured by these Sukuk, to finance a land acquisition. These transactions are related-party because MCDC's CEO and Board Member, Mr. Mohammed Abdul Karim Al-Nafie, is a board member of AlJazira Bank, and Board Member Mr. Turki Ibrahim Al-Qunaibit has a first-degree relative who is a major shareholder of AlJazira Bank.

Mitigating Factors: The transactions were disclosed as being conducted without preferential terms, and the bridge financing is secured by government Sukuk.

For more, click here to view the full governance profile →

In-Depth Analysis