Top 15 Stocks With Dividend Yield of More Than 8%

Posted by: Aamir Hayat Like: 0 Post Date: May 9, 2026

Top 15 Stocks With Dividend Yield of More Than 8%

7. Pakistan Tobacco Company Limited (PAKT)

Forward Dividend Yield: 10.1%

Pakistan Tobacco Company Limited remains one of the market’s strongest cash-generating businesses, supported by pricing power, stable margins, and a long history of shareholder payouts.

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Dividend yield remains among the highest on PSX

The stock currently offers a dividend yield of around 10% to 12%, making it one of the highest-yielding consumer names on the Pakistan Stock Exchange. The company paid a cumulative dividend of approximately PKR 150–155 per share over the last twelve months, with quarterly and interim payouts remaining frequent and consistent. Most recently, the board approved a second interim dividend of PKR 35 per share for 2026, continuing its aggressive payout trend.

Strong profitability continues to support payouts

Pakistan Tobacco Company delivered solid earnings growth during 2025 despite pressure from excise duties and affordability concerns in the broader tobacco market. For the first nine months of CY25, profitability reached PKR 24.52 billion, with earnings per share rising to PKR 95.96, reflecting a 23% year-over-year increase. In the third quarter alone, earnings stood at PKR 10.26 billion, while EPS came in at PKR 40.15, supported by stronger margins, higher other income, and improved cost management. Full-year 2025 earnings per share were reported at around PKR 116.85, while net profit margins remained above 21%.

Pricing power remains a key strength

One of the company’s biggest advantages is its ability to pass on higher costs through pricing. Management has continued implementing price increases to offset rising excise duties and inflationary pressures, helping protect margins even during periods of slower volume growth. This pricing power is especially important in Pakistan’s tobacco industry, where operating margins and cash flow generation remain significantly stronger than in many other consumer sectors.

Industry risks remain

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Despite strong financial performance, the tobacco sector continues to face structural challenges. Management highlighted that the industry is dealing with affordability pressures and a growing illicit cigarette market, which is estimated to account for around 57% of the industry. In addition, regulatory and taxation risks remain an important factor for long-term investors.

Cash generation supports dividend sustainability

Pakistan Tobacco Company’s investment case remains heavily centred around its ability to generate cash consistently. The company has maintained frequent interim dividend payments, even during periods of regulatory pressure, highlighting the strength of its operating model and liquidity profile. Investor discussions within Pakistan’s retail market also frequently highlight the stock’s strong cash flow generation and high dividend payouts, although some investors remain cautious due to liquidity, regulatory uncertainty, and sector-related ethical concerns.

Bottom line

Pakistan Tobacco Company Limited continues to stand out as one of the highest dividend-paying consumer stocks on the PSX. With dividend yields exceeding 10%, strong margins, and consistent cash generation, the company remains attractive for income-focused investors. However, the investment case also comes with elevated regulatory and taxation risks tied to the tobacco industry.

⚠️ 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 →