Top 3 Stocks by ROE for 2026 According to Foundation Securities

1. EFERT (Engro Fertilizers Limited): Cultivating Shareholder Value with a 69.4% ROE

Topping the list is EFERT, with an exceptional projected Return on Equity of 69.4% for 2026. Reflecting Foundation Securities’ “Outperform” rating on the fertilizer sector, EFERT is positioned as a top performer due to its diversified portfolio, efficient operations, and its ability to capitalize on Pakistan’s agricultural demand amid recovering demand and the ability to pass on costs.

Key Bullish Triggers for EFERT

Foundation Securities’ bullish case for EFERT is built on three strategic pillars:

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Specialty Fertilizers and Agri-Innovation: The company is expanding its product line into higher-margin specialty fertilizers such as NPK, DAP, Envy, and Zingro. This move aligns with the broader agricultural shift towards balanced crop nutrition and enhances EFERT’s revenue diversity.

Market Position & Capacity Enhancements: The NPK plant at Port Qasim strengthens EFERT’s domestic market presence, where it already controls 100% of the market share in that specific segment. This expansion allows the company to target higher-value crop segments effectively.

Attractive Dividend Yield: EFERT has a powerful and consistent dividend policy, distributing 100% of its earnings to shareholders, with a 10-year average payout ratio of approximately 101%. The report forecasts a robust dividend yield for CY26E at 10.5% and for CY27E at 11.7%, making it an attractive option for income-focused investors.

Conclusion

In a market environment where Foundation Securities projects a 214k index target, the strategic maneuvers of companies like EFERT, SAZEW, and AIRLINK are not just isolated success stories; they are prime examples of the sector-specific catalysts expected to fuel this broader market rally. Their high Return on Equity projections are backed by specific triggers, including expansion into higher-margin products, innovation in high-growth sectors like EVs, and operational efficiencies driven by strategic shifts and favorable tax policies. According to the analysis in the “Pakistan Strategy 2026” report, these companies represent significant potential driven by well-defined growth plans.

⚠️ 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 →