Top 15 Stocks With Dividend Yield of More Than 8%

4. Pakistan Oilfields Limited (POL) 

Forward Dividend Yield: 10.9%

Dividend Profile and Yield Outlook

POL is characterized as a “premium yield play” and the only “safe dividend play” within the E&P coverage, primarily due to its strong operating leverage and relative insulation from circular debt.

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• Average Payout Ratio: POL has maintained an average payout ratio of approximately 80% to 90% over the past five years.
• Dividend Yield Forecasts:
  • FY26e: 11.7% to 12%.
  • FY27e: 12.3%.
  • FY28e: 13.2%.
• Dividend Per Share (DPS) Forecasts:
  • FY25a: PKR 75.0.
  • FY26e: PKR 74.9.
  • FY27e: PKR 78.4.
  • FY28e: PKR 84.4.
• Yield Rationale: The company’s ability to sustain high payouts is supported by a robust balance sheet and superior cash flow conversion. It maintains a Free Cash Flow (FCF) ratio exceeding 110% over the last five years, with cash flow per flowing barrel nearly double the sector average.
• Cash Reserves: As of 1Q26, POL held significant liquid cash and financial assets amounting to PKR 112 billion (equivalent to PKR 396 per share), which represents approximately 63%–67% of its total market capitalization.

Operational and Corporate Briefing Highlights

POL’s operations remain oil-heavy, which provides better wellhead price realizations compared to gas-focused peers.

• Production Mix: Crude oil contributes over 50% of the company’s top line, while natural gas accounts for roughly 28%.
• Asset Concentration: The TAL Block is the company’s primary contributor, accounting for 60% of total production.
• Recent Well Successes:
  • Makori Deep-03: Recently drilled well that flowed 22.08 MMSCFD of gas and 2,112 bbl/d of condensate.
  • Razgir-1: Delivered flows of 25.1 MMSCFD of gas and 333 bbl/d of condensate.
• Reserves Replacement: For FY25, POL reported a sector-leading reserve replacement ratio (RRR) exceeding 200%, primarily driven by a sharp upward revision in the Jhandial field.
• Risk Mitigation: Unlike its peers, POL is largely shielded from circular debt because a high proportion of its sales are liquid and centered around its associate refinery rather than government-owned gas utilities.

Pakistan Oilfields Limited (POL)

Pakistan Oilfields Limited is widely regarded as one of the most reliable dividend-paying companies in the exploration and production (E&P) space. Its ability to generate strong cash flows and maintain high payouts makes it a preferred choice for income-focused investors.

Dividend profile remains a key strength

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POL has consistently maintained a payout ratio of around 80% to 90% over the past five years, reflecting its commitment to returning cash to shareholders. The dividend outlook remains strong. The company is expected to deliver a dividend yield of 11.7% to 12% in FY26, rising to 12.3% in FY27 and further to 13.2% in FY28. In line with this, projected dividends stand at PKR 74.9 for FY26, increasing to PKR 78.4 in FY27 and PKR 84.4 in FY28, compared to PKR 75.0 in FY25.

Strong cash flows support payouts

The sustainability of these dividends is backed by strong cash generation. POL has maintained a free cash flow ratio exceeding 110% over the past five years, with cash flow per flowing barrel nearly double the sector average. This high cash conversion allows the company to continue paying attractive dividends without putting pressure on its balance sheet.

Stable financial performance

The company’s financials reflect consistency and resilience. In FY25, POL reported net sales of PKR 57,117 million and a profit after tax of PKR 24,182 million, translating into an EPS of PKR 85.2. For FY26, net sales are projected at PKR 55,905 million, with profit after tax of PKR 23,608 million and EPS of PKR 83.2. While a slight decline is expected, overall profitability remains strong. Margins also remain robust, with an EBITDAX margin of 75% in FY25, expected to moderate slightly to 70% in FY26.

A cash-rich balance sheet adds comfort

One of POL’s biggest strengths is its liquidity. As of 1QFY26, the company held PKR 112 billion in cash and financial assets, equivalent to PKR 396 per share. This represents roughly 63% to 67% of its total market capitalization, highlighting an exceptionally strong balance sheet.

Operational strengths and production mix

Operationally, POL benefits from a favorable production mix. Crude oil contributes over 50% of its revenue, while natural gas accounts for around 28%. This oil-heavy mix allows the company to benefit from better pricing compared to gas-focused peers. The TAL Block remains the core asset, contributing around 60% of total production, making it central to the company’s output and earnings.

Recent exploration success supports growth

Recent drilling activity has also been encouraging. The Makori Deep-03 well delivered flows of 22.08 MMSCFD of gas and 2,112 barrels per day of condensate, while the Razgir-1 well produced 25.1 MMSCFD of gas and 333 barrels per day of condensate. In addition, POL reported a reserve replacement ratio exceeding 200% in FY25, driven largely by an upward revision in the Jhandial field. This indicates strong sustainability of its resource base.

Limited exposure to circular debt

Unlike many peers in the energy sector, POL remains relatively insulated from circular debt. A large portion of its sales is liquid and linked to its associate refinery, rather than government-owned gas utilities. This reduces payment delays and improves cash flow visibility, further strengthening its dividend profile.

Bottom line

Pakistan Oilfields Limited offers a compelling combination of high dividend yield, strong cash flows, and a robust balance sheet. With yields consistently above 10%, strong liquidity, and operational stability, POL stands out as one of the most reliable income-generating stocks for investors seeking returns above 8% in Pakistan’s market.

⚠️ This post reflects the author’s personal opinion and is for informational purposes only. It does not constitute financial advice. Investing involves risk and should be done independently. Read full disclaimer →