Top 10 Profitable Shares to Buy in Kenya [2024 Picks]

Whenever I talk to people about investing in the stock market, one of the most common questions I get is; what are the best shares to buy in Kenya?

This question was much easier to answer a few years back when the Nairobi Securities Exchange was at its prime. However, with the dwindling economy and foreign investors pulling the plug,¹ NSE has plunged 11.57% in market capitalization in Q1 2023. ²

The best stocks at the NSE have also taken a hit. For instance, blue-chip stocks like Safaricom have dropped over 45 percent in the last 12 months,³ with KCB’s market value dropping below KSh. 100 billion.⁴

However, this does not mean that the stock market is no longer a safe haven for investors.

In fact, there is no better time to invest in stocks. The only thing that is tricky for new investors right now is finding the right stocks to invest in. But you don’t have to worry about that. I have done plenty of research and identified the top-performing stocks in Kenya you can invest in.

So, if you are looking to make the best out of what is likely to be a good market in 2023, I have identified some of the top companies that you should prioritize.

The Best Stocks to Buy in Kenya in 2023

• Safaricom PLC
• Kenya Commercial Bank Group
• Britam Holdings PLC
• Equity Bank Group
• Nation Media Group
• Centum Investment Company Ltd
• Limuru Tea Company
• Kakuzi Limited
• Bamburi Cement Limited
• Car and General Limited

1. Safaricom PLC Shares

As I mentioned in the introduction, Safaricom has not been doing well in the stock market for the past year. The company has been recording declining profits for three consecutive years and recently reported a 22.2% decline in profits after tax for the financial year ending March 2023.⁵

Its performance at the NSE has also been bearish with the share price and market cap adopting a downtrend trajectory. This trend was mostly motivated by a recent massive sell-off by foreign investors during last year’s election.⁶

That said, Safaricom is still a pretty stable stock. At the time of writing, the company was still at the top of the NSE chats with a KSh 671.55b market cap and a KSh. 17 share price. ⁷

So, even as the telecommunications company struggles to rejuvenate its profit margins, it still offers one of the best shares to buy in Kenya.

Here is why:

Safaricom accounts for over 40% of NSE’s market cap, meaning it’s a giant stock. In fact, when Safaricom announced a 22.2% profit decline in March, NSE lost KSh 116 billion in three days, dragging its market cap to below KSh. 1.5 trillion.⁸ What does this mean? It means you cannot ignore Safaricom when looking for the best stocks to buy in Kenya.

2. Kenya Commercial Bank Group (KCB)

KCB has suffered mostly the same fate as Safaricom, especially in relation to massive foreign investor exodus. The bank saw its market value drop below KSh. 100 billion for the first time since 2019, in May 2023. This was mainly due to foreign investors exiting NSE early this year by selling massive shares in blue-chip stocks and the weakening value of the shilling. ⁹

Despite this, the banking sector recorded increased earnings for the year ended December with the majority declaring higher dividend payouts. In fact, KCB recorded KSh. 9.8 billion in profit after tax for the first quarter of 2023, with its total assets growing by 39.8% to close at KSh. 1.63 Trillion. ¹⁰

So, despite its bearish run at the NSE, this is still a company with solid fundamentals. At the time of writing, KCB’s share price stood at KSh. 32.0 with a market cap of KSh. 102.51 billion, according to MarketWatch.¹¹

Generally, KCB has a good history of paying out dividends to its shareholders on time. In fact, the company paid more than KSh 15 billion in dividends between 2010 and 2019.

In 2019 alone, the company disbursed KSh 2.12 billion in dividends to the treasury.¹² Later in Jan 2022, the bank’s shareholders approved KSh. 9.64 billion in dividends payout for the 2021 financial year. ¹³

As you can see, KCB has some really solid stats, which means more profits in the future. Meanwhile, the fact that it pays its shareholders dividends on time signals that it has a lot of staying power.

Finally, the bank’s profitability is a great example of its competitive advantage, in that it can reasonably expect to make more money in 2023 than competitors do.

All these factors combined mean that Kenya Commercial Bank Group is one of the best stocks to buy in Kenya right now.

3. Britam Holdings Ltd.

Britam is no doubt one of the biggest insurance providers in Kenya right now. The company has a market capitalization of around KSh 12.31 billion.¹⁴

Shares in Britam are currently trading for around Kshs 4.88 each, which is much lower than the first two companies we have looked at. However, the stock is still pretty solid and a good option if you’re just starting out and looking for something affordable.

Britam Holdings has been around since 1965 and has consistently paid dividends for many years now. In fact, the company paid its shareholders dividends worth KSh 630.9 million at KSh 0.25 per share in 2021.¹⁵

Britam differs from KCB and Safaricom in that it does not pay dividends every year, but only when there is a special dividend up for grabs. For instance, the company did not pay its shareholders dividends for the financial year 2020 due to a depressed performance.

However, even though the company only pays dividends periodically, its reliability means that you will be paid for holding the stock.

Lastly, as a Kenyan company with a long history of making money and paying dividends, Britam is likely to be around for a long time.

This means that people will continue to hold its shares and potentially pay out another batch of dividends.

All this means that Britam Holdings PLC is one of the best shares to buy in Kenya in 2023.

4. Equity Group Holdings

Equity bank has been a huge player in the Kenyan financial sector. It is ranked among the top banks in the country and is a favourite of many investors.

The company’s market capitalization is around KSh 145.29 billion¹⁶, making it the second most valuable company in Kenya by market cap.¹⁷

Equity Bank has been in business for over 40 years, which means it is a well-established player in Kenya’s financial industry. Plus, unlike many banks in the world (that have been found guilty of committing crimes), Equity Bank has a clean record.

In fact, Equity is also the largest bank in Kenya by assets.

Although Equity’s dividend policy is not very reliable, it has one of the biggest payouts. For instance, the company announced a payout amount of Sh9.43 billion in 2020.¹⁸

This is close to KCB’s payout of around Ksh 11 billion for the same year. So, clearly, Equity Bank will be a great pick for your investment portfolio.

5. Nation Media Group

Nation Media Group is a media conglomerate that controls a group of print, digital, and broadcast media. These include NTV, Daily Nation, Taifa Leo, Business Daily, and many more.

The Group’s market capitalization stands at KSh 3.56 billion, which is quite low compared to the other companies in this list. With around KSh 20.0¹⁹ price per share (at the time of writing), this is one of the cheapest shares you can buy in Kenya right now.

NMG has been in Kenya’s media and entertainment industry for over six decades and is widely regarded as the market leader in this space.

In 2023, Nation Media Group is expected to remain one of Kenya’s top companies in its field. The company even recently reshuffled its top leadership in a bit to keep up with the ever-changing market dynamics.

Plus, its presence in the print and online media industry means that it will remain relevant in the foreseeable future.

Besides all this, what makes Nation Media Group one of the best stocks to buy in Kenya right now is the fact that it pays dividends regularly. For instance, it paid out dividends worth Kshs 6 billion in 2019.

For these reasons, Nation Media Group is no doubt one of the best stocks to buy in Kenya right now.

6. Centum Investment Company Ltd

Centum Investment Company Ltd is a financial services provider with a market capitalization of Kshs 9.32 billion.

Over the past four decades, this company has been able to build a strong presence in Kenya’s finance industry. In fact, it is one of the most valuable investment firms in the country.

In 2023, Centum will probably continue to offer lucrative investment opportunities to people who hold its shares. That is because this company has a long history of making money and paying dividends.

Moreover, the fact that its services close to 50,000 investors mean that there are many people who believe in the company’s ability to turn a profit.

And Centum is likely to remain relevant in 2023 and going forward, you can expect to enjoy a steady stream of profits and dividends over the years.

At the time of writing, Centum shares were selling at around Ksh 14.2 each, making it among the most affordable stocks to buy in Kenya.

7. Limuru Tea Company

If you are looking for some profitable shares in the agricultural sector, you won’t go wrong with Limuru Tea Company. This is among the biggest growers of green leaf tea in Kenya and is an out-grower to Unilever Tea Kenya Limited.

For this reason, Unilever holds about  52% of the issued share capital of Limuru Tea and acts as the company’s managing agent in the growing, manufacturing, sales, and marketing of its teas.²⁰

This is one of the most valuable companies in Kenya with a market cap of around KSh 768 million and a price per share of KSh 320 at press time. The low market capitalization is because the company has only 2.4 million shares outstanding.

This is fairly low compared to a company like Safaricom which has over 40 billion shares

The limited number of shares is also why the price is relatively high compared to the other companies.

What makes Limuru Tea one of the best stocks to buy in Kenya right now is the fact that its potential for growth has not been fully realized.

Also, unlike most tea companies in Kenya (that do not pay dividends), Limuru Tea rewards its shareholders with dividends whenever it makes a profit.

As one of Kenya’s leading tea companies, Limuru Tea is likely to grow even further over the next several years.

The company continues to benefit from its position as a market leader as it is still able to command higher prices for its goods. This in turn brings in a lot of revenue in the form of dividends.

8. Kakuzi Limited

This is a Kenyan agro-processing firm that specializes in the production of tea, coffee, macadamia nuts, avocado, blueberries, livestock, and commercial forestry.

Its market capitalization stands at KSh 7.69 billion with a high price per share of Ksh 415. Kakuzi is listed both at the Nairobi Securities Exchange (NSE) and London Stock Exchange.

Even though this is a relatively small company (in terms of market capitalization), it makes for an excellent investment opportunity because you will get good returns on your money as past investors have proved.

This is one of the most valuable agricultural firms in Kenya with multiple awards in the sector.²¹

Kakuzi Limited currently has a price-to-earnings ratio of 14.96, which means that you can expect good returns on your money if you invest in this company right now.

What makes Kakuzi one of the best stocks to buy in Kenya right now is the fact that it focuses on sustainable agriculture practices. This means that production costs are relatively low, which in turn means that even if it faces stiff competition in the market, Kakuzi is still likely to offer good returns.

That being said, one of the main reasons why you should buy shares in this company is its dominance in the agricultural sector. For instance, it produces 40% of macadamia nuts sold in Kenya and has been invariably lauded as the largest avocado exporter in the country.

So, for anyone looking for the best shares to buy in Kenya, Kakuzi definitely deserves a spot in your portfolio.

9. Bamburi Cement Limited

Another good stock for you to buy is Bamburi Cement Limited.

This is a leading cement company in Kenya that has experienced steady growth over the years.

Its market cap currently stands at KSh 13.96 billion, which means you can buy 1000 shares of this company for around KSh 38,000. Bamburi Cement is ranked the most valuable cement manufacturer with a market share of around 32.6%.

The main reason why buying Bamburi Cement Limited makes sense is that it is a local company that has operations in multiple countries. This gives it an edge, as it is likely to continue enjoying steady sales regardless of what happens in the Kenyan economy.

For instance, even though cement demand might slump in Kenya, you can expect Bamburi Cement Limited’s operations abroad to offset those losses and keep this company profitable.

This is especially true since the cement market in Kenya has an annual growth rate of close to 5%. This means that even if Bamburi Cement Limited does not make any major changes, it will still grow steadily over the next four years (and this pace can be accelerated by making some tactical decisions).

Finally, another reason why you should invest in this company is its profitability metrics. For instance, Bamburi Cement Limited’s investment yield is close to 8%, while its debt-to-equity ratio stands at under 10%. Combined with a P/E ratio of 44.04, these numbers point to good returns for you if you buy shares in the company today.

10. Car and General Limited

Another company that is profitable now and likely to remain so in the future is Car and General Limited.

This company’s share price currently stands at KSh 62.25 each, which means that you will need around KSh 62,250 to buy 1000 shares of the company. There are a number of reasons why you should buy shares in Car and General Limited right now.

For instance, this is a leading motor vehicle dealer in Kenya that also offers insurance and finance services to its customers. This gives it an edge because even if the Kenyan economy is struggling (and the automotive sector is reeling from it), Car and General will still remain profitable.

That being said, one of the main reasons why you should buy shares in this company is that it has a well-diversified product offering. For example, its finance and insurance services (which account for almost 30 percent of sales) help to insulate it from economic shocks.

Another reason to buy Car and General Limited shares is that it offers steady returns on investment. For instance, this company offers a 16.32% return on invested capital which is not that bad.

This means you can expect to continue earning healthy profits if you buy shares in the company today.

Factors to Consider When Picking the Best Shares to Buy in Kenya

There are several things you should look at before buying the shares or stocks of a given company.

Here are some factors to look at:

• Company Fundamentals: Examine the company’s financial health, including its revenue growth, earnings history, profitability, debt levels, and cash flow. Look for companies with strong and consistent financial performance.
• Industry and Sector: Consider the industry and sector the company operates in. Different sectors may perform differently based on economic conditions, regulations, and trends. I recommend diversifying across sectors so you can manage risk.
• Market Trends: Stay updated on current market trends and economic indicators that might impact the company’s performance. External factors like interest rates, inflation, and political stability can affect the stock market.
• Management Quality: Evaluate the company’s management team. A strong and experienced leadership team is more likely to make sound business decisions and navigate challenges effectively.
• Competitive Advantage: Look for companies that have a unique competitive advantage, such as a strong brand, proprietary technology, or a dominant market position. A competitive advantage can help the company maintain its profitability over the long term.
• Dividend History: If you’re looking for the best dividend stocks in Kenya, make sure to research the company’s dividend history and payout policy.
• Valuation: Analyze the company’s valuation metrics, such as price-to-earnings (P/E) ratio, price-to-book (P/B) ratio, and other relevant ratios. Compare these ratios with industry peers and historical averages to determine if the stock is overvalued or undervalued.
• Growth Prospects: Consider the company’s potential for future growth. To do this, research its expansion plans, new product offerings, and market opportunities. Companies with strong growth prospects might have a higher potential for stock price appreciation.
• Market Capitalization: The size of the company, as measured by its market capitalization (total market value of outstanding shares), can influence its volatility and potential for growth. Larger companies might offer more stability, while smaller companies might have higher growth potential but also higher risk.
• Corporate Governance: Evaluate the company’s corporate governance practices. Look for companies with transparent and ethical governance since they tend to be more reliable and trustworthy.
• Risk Tolerance: Assess your own risk tolerance and investment objectives. Different stocks carry different levels of risk, so make sure your investment aligns with your risk appetite and financial goals.

How to Buy The Best Shares in Kenya: Choose a Good Stockbroker

There are a number of stockbrokers in Kenya that allow you to buy shares. However, not all brokers can provide you with access to shares listed on the Nairobi Securities Exchange (NSE).

It is, therefore, important that you choose a stock broker that both NSE and CMA approve. This will help you to insulate yourself against investment risks.

Otherwise, you get access to these stocks is by applying for a Capital Markets Authority-registered trading account. These accounts let you trade in all securities that are listed on the NSE without using a stockbroker.

1. Business Daily, Foreign investors dump over four billion NSE shares
2. Capital Business, NSE Market Capitalization Drops To Sh1.75trn In Q1 2023
3. The Star, Safaricom share price drops as investors react to results
4. Business Daily, KCB market value falls below Sh100bn as bear run deepens
5. NTV Kenya, Safaricom PLC reports 22.2% profit decline in FY ended March 2023
6. The Standard, Foreign investors sold off Sh12b at NSE before polls
7. MarketWatch, Safaricom PLC
8. Business Daily, NSE wealth down Sh116bn on Safaricom profit decline
9. The East African, Kenyan shilling slips to new all-time low against US dollar
10. KCB Group, KCB Group Records KShs. 9.75 Billion Q1 Net Profit as Total Assets Rise by 39.8% to Close at KShs. 1.63 Trillion
11. MarketWatch, KCB Group Ltd.
12. KCB Group, KCB Group Disburses KSh 2.12 B Dividend Payout to Treasury
13. KCB Group, KCB Group Shareholders Approve KShs. 9.64B in Dividend Payout
14. MarketWatch, Britam Holdings Ltd.
15. Business Daily, Britam shareholders to get KSh 630 million dividend
16. Financial Times, Equity Group Holdings Ltd
17. Statista, Leading companies in Kenya in 2022, by market capitalization
18. The Star, Dividend dry spell at Equity to end this year
19. MarketWatch, Nation Media Group
20. Kenyan Wall Street, Unilever Approves Transfer of Stake in Limuru Tea to UK’s TeaCo
21. Capital Business, Kakuzi Scores Five Nominations Ahead Of The Kenya Avocado Excellence Awards