5 Best Companies to Buy Shares in Kenya: A Comprehensive Investment Guide for 2025

For long-term investors, the key is identifying companies with a proven track record of growth, reliable dividend payments, and strong market positions. In this guide, we break down the 5 best companies to buy shares in Kenya, highlighting their share price performance, dividend history, and growth potential.

The Nairobi Securities Exchange (NSE) has experienced remarkable growth in 2025, adding KES 477 billion in investor wealth during the first half of the year alone. With the NSE All Share Index climbing 24.25% and strong corporate earnings across multiple sectors, Kenyan investors are witnessing one of the strongest bull markets in over a decade. This presents exceptional opportunities for both capital appreciation and dividend income.

Understanding Investment Returns: Capital Gains vs Dividend Yield

Before diving into specific company recommendations, it’s essential to understand the two primary ways stocks generate returns for investors.

Capital Gains represent the profit earned when a stock is sold at a higher price than its original purchase price. The formula is simple: Sale Price – Purchase Price = Capital Gain. This form of return reflects the appreciation in value of your investment over time and is only realized when you sell the stock. Capital gains are particularly attractive for growth-oriented investors who can benefit from lower long-term capital gains tax rates.

Dividend Yield is the financial ratio that measures the quantum of cash dividends paid out to shareholders relative to the market value per share. It is calculated as: Dividend Yield = Annual Dividend / Current Stock Price × 100%. Dividends provide regular income streams and are typically paid quarterly, semi-annually, or annually, depending on company policies. They represent a company’s way of sharing profits with shareholders and are a sign of financial health and profitability.

The importance of both investment returns cannot be overstated:

• Capital gains offer potential for higher returns and tax efficiency, especially for long-term investments
• Dividend yields provide steady income and portfolio stability during market volatility
• Together, they form the total return on investment, combining growth and income components

Top 5 Best Companies to Buy Shares in Kenya

Based on comprehensive analysis of performance, dividend yields, growth potential, and market fundamentals, here are the five best companies to consider for investment on the Nairobi Securities Exchange:

1. Stanbic Holdings (SBIC) – Banking Sector

Current Performance: KES 183.75 per share (as of August 2025)

Capital Gains Analysis:

• Price 5 years ago (2020): KES 72.25 (all-time low)
• Current price: KES 183.75
• 5-year capital gains: 149.66%
• Absolute gain: KES 111.50 per share

Why Invest:
Stanbic Holdings has delivered exceptional performance with the highest capital gains among banking stocks. The bank is currently the ninth most valuable stock on the NSE with a market capitalization of KES 72.8 billion. It has gained 34.2% year-to-date and 56.8% over the past year, ranking 22nd on NSE in terms of performance. The bank’s strategic position as part of the Standard Bank Group provides strong regional presence and stability.

Dividend Performance:

• Current dividend yield: 11.29% – one of the highest in the banking sector
• Annual dividend: KES 20.74 per share
• Recent interim dividend: KES 3.80 announced in August 2025
• Consistent dividend growth with a 35.1% increase from 2023

Growth Potential: Stanbic has shown strong earnings growth with 34.2% increase in profit after tax. The bank’s diversified business segments including Corporate Investment Banking, Personal Business Banking, and Financial Services provide multiple revenue streams.

2. KCB Group (KCB) – Banking Sector

Current Performance: KES 54.00 per share (as of August 2025)

Capital Gains Analysis:

• Price 5 years ago (2020): Approximately KES 34.30
• Current price: KES 54.00
• 5-year capital gains: 50.00%
• Absolute gain: KES 23.70 per share

Why Invest:
KCB Group stands out as Kenya’s leading commercial bank with exceptional performance. The bank has demonstrated remarkable resilience and growth, with its market capitalization increasing by 50.00% over the past year. KCB has consistently delivered strong financial results and maintained its position as the third most traded stock on the NSE.

Dividend Performance:

• Current dividend yield: 7.80%
• Annual dividend: KES 3.00 per share
• They also offered a special dividend of KES 2.00
• Regular dividend payments with consistent growth

Growth Potential: KCB’s strategic expansion across East Africa, digital transformation initiatives, and strong corporate governance make it an attractive long-term investment.

3. Equity Group Holdings (EQTY) – Banking Sector

Current Performance: KES 56.00 per share

Capital Gains Analysis:

• Price 5 years ago (2020): Approximately KES 36.75
• Current price: KES 56.00
• 5-year capital gains: 55.56%
• Absolute gain: KES 19.25 per share

Why Invest:
Equity Group has shown remarkable transformation with 17% growth in profit after tax to KES 34.6 billion in H1 2025. The bank has successfully diversified across multiple African markets and demonstrated strong financial performance despite challenging macroeconomic conditions.

Dividend Performance:

• Current dividend yield: 9.30%
• Recent annual dividend: KES 4.25
• Expected EPS growth of 19% per annum
• The bank has maintained consistent dividend payments

Growth Potential: Forecasted to grow earnings by 19.4% and revenue by 18.1% per annum. The bank’s expansion into agriculture, mining, manufacturing, and SME financing positions it for sustainable growth.

4. East African Breweries (EABL) – Food & Beverage Sector

Current Performance: KES 220.00 per share

Capital Gains Analysis:

• Price 5 years ago (2020): Approximately KES 161.00
• Current price: KES 220.00
• 5-year capital gains: 44.74%
• Absolute gain: KES 59.00 per share

Why Invest:
EABL is East Africa’s leading brewery company with strong brand portfolio and market dominance. The company has shown consistent performance with 43.8% gains over the past year. It operates across Kenya, Uganda, and Tanzania, providing geographic diversification.

Dividend Performance:

• Current dividend yield: 3.6%
• Annual dividend: KES 8.00 per share
• Recent final dividend: KES 5.50 announced in July 2025
• Consistent dividend payments with stable yield

Growth Potential: Earnings are forecast to grow 26.89% per year. The company’s strong market position, brand loyalty, and expansion opportunities across East Africa support long-term growth prospects.

5. Co-operative Bank (COOP) – Banking Sector

Current Performance: KES 17.60 per share

Capital Gains Analysis:

• Price 5 years ago (2020): Approximately KES 10.50
• Current price: KES 17.45
• 5-year capital gains: 53.71%
• Absolute gain: KES 5.87 per share

Why Invest:
Co-operative Bank has demonstrated strong performance with 37.6% gains over the past year. The bank has a unique cooperative model and strong presence in rural markets, providing stability and growth opportunities.

Dividend Performance:

• Current dividend yield: 10.42%
• Annual dividend: KES 1.50 per share
• One of the highest dividend yields among major banks
• Consistent dividend payment history

Growth Potential: The bank’s cooperative structure, rural market penetration, and focus on SME banking provide sustainable competitive advantages.

Top 5 NSE companies with highest dividend yields in 2025, led by Stanbic Holdings at 11.29%

5-year capital gains performance (2020-2025) of top 5 recommended NSE companies

How to Purchase Shares in Kenya

Step 1: Open a CDS (Central Depository System) Account

You must open a CDS account to trade shares on the NSE. This electronic account holds your securities and eliminates paper certificates.

Requirements:

• Two colored passport-sized photographs
• KRA PIN certificate
• National ID or passport (original and copy)
• Proof of residence
• Proof of income (payslip or bank statement)

Step 2: Choose a Licensed Stockbroker

You cannot buy shares directly; you need a licensed stockbroker. Popular brokers include:

• Faida Investment Bank
• SBG Securities
• NCBA Investment Bank
• Kingdom Securities

Step 3: Complete Account Opening Process

• Fill out CDS 1 form with your chosen broker
• Submit required documents for verification
• Wait for account confirmation (usually within 24-48 hours)

Step 4: Fund Your Account

Deposit money through:

• M-Pesa (Paybill)
• Bank transfer to broker’s account
• Direct deposit

Step 5: Place Your Orders

• Use broker’s trading platform or mobile app
• Minimum purchase: 100 shares
• Choose between market orders or limit orders

Step 6: Settlement

• Trades settle within 3 days (T+3)
• Shares are credited to your CDS account
• Receive contract notes and statements

Investment Risks and Considerations

Market-Specific Risks

1. Shallow Market Liquidity
The NSE is considered a shallow market with limited liquidity and few actively traded stocks. Only 66 companies are listed compared to South Africa’s 274 listed companies.

2. Market Concentration Risk
The banking sector comprises 43.7% of market capitalization, making the market heavily concentrated in few sectors. The top companies dominate market movements.

3. Regulatory and Policy Risks
Changes in government policies, taxation, and regulatory frameworks can significantly impact stock performance. The Capital Markets Authority has been updating regulations to address market challenges.

4. Currency Risk
For investors with foreign currency exposure, exchange rate fluctuations can affect returns.

5. Economic and Political Risks
Kenya’s stock market is sensitive to:

• Political stability and election cycles
• Economic growth rates and inflation
• Interest rate changes by the Central Bank
• Regional economic conditions

Company-Specific Risks

6. Credit Risk (Banking Stocks)
Banks face loan default risks, especially during economic downturns. With four of the five recommended companies being banks, this concentration risk is significant.

7. Commodity Price Risk
Companies in manufacturing and beverages face input cost volatility.

8. Operational Risks
Poor management decisions, corporate governance issues, and operational inefficiencies can impact stock performance.

Investment Risks

9. Price Volatility
Stock prices can experience significant fluctuations, leading to potential losses. Banking stocks have shown particular volatility in recent years.

10. Dividend Risk
Companies may reduce or eliminate dividend payments during financial difficulties. While the recommended companies have strong dividend histories, economic pressures can affect future payments.

Risk Mitigation Strategies:

• Diversify across sectors and companies
• Conduct thorough fundamental analysis
• Maintain a long-term investment horizon
• Stay informed about market developments
• Consider professional investment advice

Conclusion

The Kenyan stock market offers significant opportunities for wealth creation, particularly with the NSE experiencing one of its strongest rallies in over a decade. Stanbic Holdings stands out as the top investment choice, showing exceptional performance with 149.66% capital gains over five years and an attractive 11.29% dividend yield.

The five recommended companies represent strong investment opportunities based on their financial performance, dividend consistency, and growth potential. However, investors must carefully assess risks, particularly the market’s concentration in the banking sector, and maintain disciplined investment approaches.

With 19 Kenyan companies offering dividend yields above 8.5% and the market showing sustained upward momentum, 2025 presents an opportune time for investors to build wealth through strategic stock investments on the Nairobi Securities Exchange.