As Gulf shares rise alongside oil prices and Egypt’s stock market reaches new highs, the Middle East continues to capture investor interest with its robust economic indicators. In such a climate, penny stocks—often seen as smaller or newer companies—can offer unique opportunities for those seeking affordable growth potential. Despite being an older term, these stocks remain relevant when backed by strong financials, and we will explore three that stand out for their promising prospects.
Name
Share Price
Market Cap
Financial Health Rating
Al-Modawat Specialized Medical (SASE:9594)
SAR4.33
SAR306.04M
★★★★★☆
Thob Al Aseel (SASE:4012)
SAR3.37
SAR1.36B
★★★★★★
E7 Group PJSC (ADX:E7)
AED1.03
AED2.1B
★★★★★★
Sharjah Insurance Company P.S.C (ADX:SICO)
AED1.52
AED228M
★★★★★★
Al Wathba National Insurance Company PJSC (ADX:AWNIC)
AED3.50
AED724.5M
★★★★★★
Arabian Pipes (SASE:2200)
SAR4.69
SAR962M
★★★★★★
Dubai National Insurance & Reinsurance (P.S.C.) (DFM:DNIR)
AED3.25
AED384.62M
★★★★★★
Dubai Investments PJSC (DFM:DIC)
AED3.55
AED15.09B
★★★★☆☆
Sharjah Cement and Industrial Development (PJSC) (ADX:SCIDC)
We’re going to check out a few of the best picks from our screener tool.
Simply Wall St Financial Health Rating: ★★★★★★
Overview: Al Dhafra Insurance Company P.S.C. operates in the insurance and reinsurance sectors across the United Arab Emirates, other GCC countries, and internationally, with a market cap of AED 486 million.
Operations: The company’s revenue is derived from investments amounting to AED 52.53 million and underwriting activities totaling AED 78.75 million.
Market Cap: AED486M
Al Dhafra Insurance Company P.S.C. presents a mixed picture for investors interested in penny stocks. The company operates without debt, which reduces financial risk, and maintains seasoned board leadership with an average tenure of 10 years. However, its earnings growth of 7.5% last year lags behind the broader insurance industry, and its return on equity is low at 7.1%. Recent earnings reports show a decrease in net income for Q3 compared to the previous year but an increase over nine months. Despite offering a dividend yield of 7.2%, it is not well-covered by free cash flows, indicating potential sustainability issues.
ADX:DHAFRA Financial Position Analysis as at Jan 2026
Simply Wall St Financial Health Rating: ★★★★★☆
Overview: Finance House P.J.S.C. operates in the United Arab Emirates offering investment, consumer, and commercial financing services, with a market cap of AED582.23 million.
Operations: The company’s revenue is primarily derived from commercial and retail financing (AED102.12 million), investments (AED11.01 million), and insurance services (AED4.46 million).
Market Cap: AED582.23M
Finance House P.J.S.C. offers a complex investment profile for those exploring penny stocks. The company is currently unprofitable, though it has managed to reduce its losses by 32.1% annually over the past five years, and its short-term assets of AED3.1 billion comfortably cover both short-term and long-term liabilities. Recent earnings reports indicate a decline in net income for Q3 to AED2.03 million from AED9.1 million the previous year, although nine-month figures show an increase to AED10.96 million from AED8.64 million last year, reflecting some financial resilience amidst challenges in profitability and return on equity.
ADX:FH Financial Position Analysis as at Jan 2026
Simply Wall St Financial Health Rating: ★★★★★☆
Overview: Union Properties (ticker: DFM:UPP) is a public joint stock company focused on property investment and development, with a market cap of AED2.46 billion.
Operations: The company’s revenue is primarily derived from goods and services at AED483.65 million, followed by contracting at AED54.82 million, and real estate and others contributing AED73.69 million.
Market Cap: AED2.46B
Union Properties presents a mixed picture for investors in penny stocks. The company has shown significant revenue growth, with third-quarter sales rising to AED197.2 million from AED123.3 million the previous year, and net income reaching AED124.67 million due to a large one-off gain of AED453.2 million impacting results. Despite this, its return on equity remains low at 10.9%, and recent earnings growth has been negative compared to industry averages, complicating comparisons over time. Positively, debt levels are well-managed with cash exceeding total debt and short-term assets covering liabilities comfortably, indicating sound financial health amidst operational challenges.
DFM:UPP Debt to Equity History and Analysis as at Jan 2026
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include ADX:DHAFRA ADX:FH and DFM:UPP.
This article was originally published by Simply Wall St.
