Beyond the Headlines: Three Under-the-Radar Middle Eastern Stocks Riding the Regional Boom
Fueled by resilient oil prices and ambitious national transformation agendas, stock markets across the Middle East are commanding global attention. While major indices in Dubai and Abu Dhabi scale new peaks, a deeper look reveals opportunities in lesser-known companies poised to benefit from structural economic shifts.
Here, we spotlight three stocks that combine strong operational performance with strategic positioning in key growth sectors, from education to consumer goods.
Academy of Learning Company (SASE:9541)
Simply Wall St Value Rating: ★★★★☆☆
Operating education and training institutes in Saudi Arabia (market cap: SAR 999 million), Academy of Learning is a direct beneficiary of the Kingdom's Vision 2030 push for human capital development. A recent SAR 72.3 million contract to train 600 Saudis underscores its role in the national agenda. The company's earnings grew 24.7% over the past year, starkly outperforming the broader consumer services sector. While capital expenditures have pressured short-term free cash flow, a manageable net debt-to-equity ratio of 21% and interest coverage of 4.6x EBIT suggest a solid financial foundation for its expansion phase.
Diplomat Holdings Ltd. (TASE:DIPL)
Simply Wall St Value Rating: ★★★★★★
This Israeli sales and distribution player in the fast-moving consumer goods sector (market cap: ₪1.45 billion) has quietly strengthened its balance sheet, reducing its debt-to-equity ratio from 79.4% to 52.4% over five years. Its 21.2% earnings growth outpaces the industry average, highlighting operational efficiency. A one-off gain of ₪34.9M for FY2025 flattered recent results but also points to strategic asset management. Despite significant capital investments (₪89M recently), its improving fundamentals and niche market strength make it a company to watch.
Gad-Dairies (Marketing 1992) Ltd. (TASE:GAD)
Simply Wall St Value Rating: ★★★★☆☆
A specialist in dairy and packaged foods (market cap: ₪1.09 billion), Gad-Dairies is innovating while growing. Its earnings skyrocketed 53.4% last year, surpassing the food industry's already strong growth. The company's launch of "The New Milk," developed with Remilk using animal-free proteins, taps into evolving consumer preferences for sustainable and kosher alternatives. Although carrying a higher net debt-to-equity ratio of 84.8%, its EBIT covers interest payments a robust 27.4 times, indicating strong earnings capacity to service its leverage.
Investor Perspectives:
Sarah Chen, Portfolio Manager (Dubai): "These picks reflect a smart thematic approach—betting on domestic consumption and human capital, not just commodities. Academy of Learning is a pure-play on Saudi's educational investment, which is non-cyclical and policy-driven."
Markus Schmidt, Independent Analyst (Frankfurt): "The region's growth story is compelling, but selectivity is key. Diplomat's balance sheet improvement is a major positive, though the one-off gain requires adjusting valuation models. Gad-Dairies' innovation is impressive, but its high leverage demands close monitoring in a rising rate environment."
Rania Al-Mansoori, Retail Investor (Abu Dhabi): "Finally, analysis that looks beyond the usual suspects! Gad-Dairies' new product is exactly the type of innovation we need. However, the disclaimer-heavy language in these reports is frustrating—just tell us if it's a good buy or not!"
David Foley, Emerging Markets Fund Manager (London): "These companies exemplify the 'second wave' of Middle East investment opportunities. They are smaller, nimbler, and often better aligned with long-term diversification goals than some of the large, state-linked conglomerates."
This analysis is based on historical data and analyst forecasts using an unbiased methodology. It is not intended as financial advice and does not constitute a recommendation to buy or sell any security. Investors should consider their own objectives and financial situation. Simply Wall St has no position in any stocks mentioned.