Amid Market Volatility, Middle Eastern Dividend Stocks Offer Yields Up to 6.3%

DUBAI/LONDON – A recent softening in oil prices, coupled with a relative easing of geopolitical tensions, has cast a shadow over several Middle Eastern equity markets, particularly in the United Arab Emirates. In such an environment of uncertainty, analysts point to dividend-paying stocks as a potential harbor for investors seeking income and a buffer against volatility.

"When growth stalls, yield often takes the driver's seat," noted Sarah Chen, a portfolio manager at Gulf Capital Advisors in Dubai. "We're seeing a tactical rotation into companies with strong cash flows and a history of returning capital to shareholders, especially in sectors less tied to the crude price cycle."

Below is an analysis of three notable dividend stocks currently screening for attractive yields, drawn from a broader list of 55 Top Middle Eastern Dividend Stocks.

Vakko Tekstil ve Hazir Giyim Sanayi Isletmeleri (IBSE: VAKKO)

Simply Wall St Dividend Rating: ★★★★☆☆
Market Cap: TRY 9.96 billion
Sector: Textile & Apparel
Dividend Yield: ~4.0%

The Turkish fashion and textile house Vakko presents a mixed picture for income seekers. Its dividend yield sits in the top quartile of the Turkish market, backed by a conservative payout ratio of just 17%. The company has maintained dividend payments for under a decade, showing stable growth in that period. However, a net loss reported for the nine months ending September 2025 raises flags about the near-term sustainability of its payouts, suggesting investors should weigh the attractive yield against recent profitability challenges.

Riyad Bank (SASE: 1010)

Simply Wall St Dividend Rating: ★★★★★☆
Market Cap: SAR 83.29 billion
Sector: Banking
Dividend Yield: ~6.3%

Saudi Arabia's Riyad Bank stands out with a yield exceeding 6%, placing it among the top income payers in the kingdom's market. While its dividend history has seen some volatility, the current payout ratio of around 55% indicates earnings adequately cover the distributions. The bank's recent move to issue $1 billion in Tier 2 capital notes underscores a strategic effort to strengthen its balance sheet. This financial maneuvering, alongside board refreshes aimed at enhancing governance, positions the bank to potentially maintain its robust dividend, even as the broader Saudi economy navigates post-oil transition plans.

Mizrahi Tefahot Bank Ltd. (TASE: MZTF)

Simply Wall St Dividend Rating: ★★★★☆☆
Market Cap: ₪ 63.27 billion
Sector: Banking & Financial Services
Dividend Yield: ~3.5%

Israel's Mizrahi Tefahot Bank offers a more modest yield compared to its regional peer, but with a compelling value proposition. Its sub-50% payout ratio suggests a high degree of safety, and a price-to-earnings ratio of 11.4x could attract value investors. Although its decade-long dividend record is inconsistent, recent improvements in net income and a focus on both domestic and international banking services provide a foundation for financial robustness. For investors comfortable with some variability in payment history, the bank represents a play on income combined with potential capital appreciation.

Market Voices: A Divided Opinion

Karim Al-Farsi, Independent Financial Advisor, Muscat: "In the current climate, a bird in the hand is worth two in the bush. These yields, especially from a solid institution like Riyad Bank, provide tangible returns while we wait for market sentiment to improve. It's a prudent defensive strategy."

Layla Cohen, Tech Startup Founder, Tel Aviv: "Chasing yield in volatile markets feels like rearranging deck chairs on the Titanic. The structural shifts away from fossil fuels and ongoing regional instability aren't priced in. I'd be looking at growth in tech and renewables, not legacy banks and textiles."

David Harrington, Retired Pension Fund Manager, London: "The analysis is sound. For the income segment of a diversified portfolio, selectively picking up quality names with sustainable payout ratios during a downturn has historically been a wise move. Mizrahi Tefahot's low P/E is particularly interesting."

Fatima Nasser, Economics PhD Candidate, Cairo: "This is a superficial take! It glosses over currency risk for international investors, the impact of inflation on real yields, and the profound governance issues still plaguing some of these markets. A high dividend yield can often be a value trap, not a safe haven."

Disclaimer: This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using an unbiased methodology. Our articles are not intended as financial advice. They do not constitute a recommendation to buy or sell any stock and do not consider your individual objectives or financial situation. We aim to deliver long-term, fundamental data-driven analysis. Note that our analysis may not incorporate the latest company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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