Top 5 High ROE Picks According to Topline Securities

Posted by: KSEStocks Data Like: 0 Post Date: July 12, 2025

4. Fauji Fertilizer Company Limited (FFC)

Expected ROE 2026: 52%

Fauji Fertilizer Company Limited (FFC) is among the most established and financially stable companies in the fertilizer sector. With forward estimates pointing to continued earnings growth and attractive shareholder returns, the company remains a key consideration for income-oriented investors.

Earnings Outlook

FFC is projected to post earnings per share (EPS) of PKR 55.1 in FY25 and PKR 59.2 in FY26. These figures imply a steady earnings trajectory, with expected growth of 21% in FY25 and 8% in FY26. The outlook reflects both operational stability and consistent demand in the fertilizer sector.

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Dividend Forecast

The company is expected to maintain its strong dividend policy, with dividend per share (DPS) forecasts of:

PKR 41.3 in FY25
PKR 44.4 in FY26

This corresponds to forward dividend yields of 10% in FY25 and 11% in FY26 based on the current market price of PKR 405 — placing FFC among the higher-yielding stocks on the exchange.

Valuation

FFC is trading at relatively low valuation multiples despite its consistent performance. The forward price-to-earnings (P/E) ratios are estimated at:

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7.4x for FY25
6.8x for FY26

Similarly, the price-to-book (PBV) ratios are projected at 3.8x in FY25 and 3.3x in FY26 — reflecting moderate valuations relative to profitability.

Return on Equity

Return on equity (ROE) is forecast at 55% for FY25 and 52% for FY26, indicating continued efficiency in capital allocation and profitability despite sectoral challenges.

Conclusion

FFC offers a combination of predictable earnings, generous dividends, and moderate valuations. The forward estimates support a case for long-term value, particularly for investors seeking stability and income. With strong forecasted ROEs and a consistent payout profile, the company remains well-positioned heading into FY25 and FY26.

⚠️ 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 →