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4165

Governance: D

ALMAJED OUD

Al Majed Oud Co.

135.40 SAR / Share

As of: May 28, 2026

16.4x P/E Ratio Trailing 12 Months

4.9x P/B Ratio Price to Book Value

3.0% Dividend Yield Annual Dividend / Share

3.38B SAR Market Cap Total Valuation

0.88 Beta Systematic Risk Index

18.3% Net Margin Net Profit / Revenue

The Story

Al Majed for Oud Company combines a rich heritage in oriental and western fragrances with an asset-light, high-return retail model that generates exceptional returns on capital.

Source: Q1 2026 (2026-05-05)

Value Creation +17.1% 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

3.0%

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

-13.1%

Payout Ratio Percent of net profits distributed as dividends

48.4%

Net Margin Net profit margin generated from total operational revenue

18.3%

ROIC Return on Invested Capital

24.7%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

16.4x

P/B Ratio Market capitalization compared to corporate book value

4.9x

EV / EBITDA Operating multiple reflecting core operational leverage

9.5x

EV / SALES Asset pricing multiple relative to total topline revenue

3.0x

Growth Story

Al Majed Oud has demonstrated robust top-line expansion, with revenue climbing from SAR 772.46 million in FY 2023 to SAR 926.00 million in FY 2024, and reaching SAR 1,103.50 million in FY 2025, culminating in a TTM revenue of SAR 1,131.61 million. This represents a steady upward trajectory driven by both domestic strength in Saudi Arabia and expanding footprints in the GCC region, where Q1 segment sales grew from SAR 70.45 million in 2025 to SAR 88.38 million in Q1 2026. Despite this strong historical revenue growth, the company's 5-year average reinvestment rate stands at -53.15%, reflecting a business model that requires minimal capital retention to sustain its operations, leading to a negative sustainable growth rate of -13.12%. This indicates that while the company has successfully expanded its retail footprint, its long-term growth capacity is highly dependent on organic brand equity and efficient working capital management rather than heavy capital reinvestment.

Profitability Dynamics

The company's profitability profile is exceptionally strong, characterized by a TTM operating margin of 19.74% and a profit margin of 18.28%, yielding a TTM net income of SAR 206.82 million. Al Majed Oud excels at value creation, boasting a 5-year average ROIC of 24.68% against a WACC of 7.59%, creating a substantial value-creation gap of 17.09%. This high return on capital is supported by an asset-light retail strategy and efficient inventory management, with inventories decreasing to SAR 195.04 million by March 31, 2026, from SAR 260.34 million at the end of FY 2025. The company's strong cash generation is further highlighted by its cash balance rising to SAR 428.57 million as of March 31, 2026, enabling the Board to recommend a generous cash dividend of SAR 100 million (SAR 4 per share) for FY 2025, demonstrating a highly disciplined approach to returning excess cash to its shareholders.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

0.88

Cost of Equity Minimum required rate of return demanded by shareholders

8.1%

WACC Weighted average cost of total debt and equity funding

7.6%

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

13.1%

Risk Factors

Al Majed Oud maintains a conservative risk profile, supported by a relevered beta of 0.88, reflecting lower volatility relative to the broader market. The company's capital structure is well-balanced, with latest total debt of SAR 444.81 million almost entirely offset by its cash reserves of SAR 428.57 million, resulting in minimal net debt. The cost of equity is estimated at 8.15%, while the after-tax cost of debt remains low at 3.35%. Business-specific risks include geopolitical tensions in the region, which management closely monitors, though no material impacts have been recorded. Additionally, the company faces operational risks related to lease commitments for its extensive retail network, with net additions to right-of-use assets and lease liabilities reaching SAR 64.32 million in Q1 2026, alongside potential inventory obsolescence, managed via a slow-moving inventory provision of SAR 2.94 million.

Governance Disclosures

Rating: D

We track 11 key governance and oversight matters for this company in our database.

Significance: 4/10 Info Asymmetry

Reclassification of Related Party Balances to Trade Receivables

Management reclassified transactions and outstanding balances due from Reef Perfumes Trading Company and Emma Otari Perfumes Company from related parties to trade receivables during the year ended 31 December 2025.

Significance: 3/10 Tunneling

Rent Expense Paid to Major Shareholders

The Group incurred rent expenses paid directly to its major shareholders, totaling SAR 582,250 for the three-month period ended 31 March 2026, compared to SAR 432,250 in the prior period.

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In-Depth Analysis