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4190

Governance: A

JARIR

Jarir Marketing Co.

15.77 SAR / Share

As of: May 28, 2026

18.0x P/E Ratio Trailing 12 Months

10.7x P/B Ratio Price to Book Value

5.5% Dividend Yield Annual Dividend / Share

18.92B SAR Market Cap Total Valuation

0.63 Beta Systematic Risk Index

9.2% Net Margin Net Profit / Revenue

The Story

Jarir Marketing Company combines a dominant retail footprint with an exceptionally high return on capital and a low-reinvestment, high-payout model.

Source: Annual 2025 (2026-05-12)

Value Creation +48.9% 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

5.5%

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

+0.9%

Payout Ratio Percent of net profits distributed as dividends

98.4%

Net Margin Net profit margin generated from total operational revenue

9.2%

ROIC Return on Invested Capital

55.9%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

18.0x

P/B Ratio Market capitalization compared to corporate book value

10.7x

EV / EBITDA Operating multiple reflecting core operational leverage

14.8x

EV / SALES Asset pricing multiple relative to total topline revenue

1.7x

Growth Story

Jarir's revenue grew from 10.59 billion SAR in FY2023 to 10.62 billion SAR in FY2024, and accelerated to 11.37 billion SAR in FY2025. This growth is increasingly driven by its e-commerce segment, which surged from 2.49 billion SAR in FY2024 to 3.67 billion SAR in FY2025, offsetting a slight decline in physical retail showroom sales from 7.77 billion SAR to 7.32 billion SAR. Despite this top-line expansion, Jarir's long-term growth capacity is structurally capped by its low reinvestment rate. With a 5-year average reinvestment rate of just 1.64%, the company channels almost all its cash back to shareholders rather than compounding internally. Consequently, its sustainable growth rate stands at a modest 0.92%, indicating that future growth will rely heavily on incremental efficiency gains and selective showroom additions, such as the expansion from 73 showrooms in 2024 to 75 in 2025, rather than massive capital-intensive projects.

Profitability Dynamics

Jarir is a premier value creator, boasting an extraordinary 5-year average Return on Invested Capital (ROIC) of 55.90%, which dwarfs its Weighted Average Cost of Capital (WACC) of 7.00%. This massive ROIC-vs-WACC gap of 48.90% highlights the company's immense economic moat and capital efficiency. Operating margins have remained stable, with an operating margin of 9.90% and a net profit margin of 9.23% in FY2025, yielding an operating income of 1.12 billion SAR and net income of 1.05 billion SAR. This profitability is backed by robust cash generation. Because the business model requires minimal capital expenditure, with Capex of 83.76 million SAR in FY2025, and maintains a highly efficient working capital cycle of 569.69 million SAR, Jarir converts nearly all its accounting profits into free cash flow, supporting its generous dividend payout policy of at least 80% of net income.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

0.63

Cost of Equity Minimum required rate of return demanded by shareholders

7.0%

WACC Weighted average cost of total debt and equity funding

7.0%

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

3.9%

Risk Factors

Jarir's risk profile is exceptionally lean, characterized by a low re-levered beta of 0.63, reflecting its defensive retail characteristics. The company has virtually eliminated its bank debt, reporting zero outstanding bank borrowings or overdrafts at the end of FY2025, down from 39.70 million SAR in FY2024. Its primary liability consists of lease liabilities of 744.24 million SAR, which are well-covered by its operating cash flows. However, the company faces specific operational and regulatory risks. Geopolitical tensions in the Middle East present potential supply chain disruptions, while the devaluation of the Egyptian Pound continues to create foreign currency translation losses on its Egyptian real estate investments. Additionally, the potential introduction of the OECD Pillar 2 global minimum tax in Saudi Arabia represents a material regulatory risk, as the company is currently only subject to Zakat, and a transition to a 15% corporate tax rate could significantly impact future net cash flows.

Governance Disclosures

Rating: A

We track 7 key governance and oversight matters for this company in our database.

Significance: 2/10 Info Asymmetry

Subsidiary Shares Registered in the Name of Trustees

Certain ownership interests in the Group's subsidiaries are registered under the names of trustees rather than the Group directly.

Mitigating Factors: The trustees have formally assigned their shares to the Company.

Significance: 4/10 Tunneling

Capital Commitments with Related Parties

The Group has outstanding capital commitments of SAR 21.1 million as of December 31, 2025, with a party related to the Board of Directors for the construction of buildings and leasehold improvements.

Mitigating Factors: The commitments are principally for constructing buildings and leasehold improvements for the Group's own operational use and rental spaces.

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In-Depth Analysis