In 2025, Kenyan companies listed on the Nairobi Securities Exchange (NSE) are delivering impressive dividend yields, surpassing the returns of Treasury bills and attracting income-focused investors.

This shift highlights a compelling opportunity for investors seeking stable income in a volatile market.

Why Dividend Yields Matter in Kenya’s Market

Dividend yields represent the annual dividend payment divided by the stock’s current price, expressed as a percentage.

A high yield can signal a strong return on investment, especially when compared to low-risk options like Treasury bills.

In 2025, the 91-day Treasury bill rate stands at 8.46%, while the one-year rate is 10.07%. With 19 Kenyan companies offering yields above 8.5% and 12 surpassing 10.07%, stocks are becoming a go-to choice for investors seeking better returns without significantly increasing risk.

The banking and energy sectors, in particular, have driven this trend, fuelled by robust profitability and consistent dividend payouts.

However, high yields can also reflect depressed share prices, so investors must balance potential rewards with risks like market volatility and sector-specific challenges.

Top Kenyan Companies with High Dividend Yields

1. Umeme: 16.6% Dividend Yield

Umeme, a Uganda-based electricity distributor cross-listed on the NSE, leads with an impressive dividend yield of 16.63%.

This high yield results from a combination of consistent dividend payouts and a relatively low share price, despite a rally from Sh9.9 to Sh14.95 by January 2024.

In March 2025, Umeme received $118 million in compensation from the Ugandan government for unrecovered investments, strengthening its financial position and supporting its dividend policy.

However, investors should note that Umeme lost its monopoly rights in Uganda in 2022, which could impact long-term growth. Despite this, its high yield makes it a top pick for income-focused investors seeking exposure to the energy sector.

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2. Standard Chartered Bank Kenya (StanChart): 17% Dividend Yield

Standard Chartered Bank Kenya, a leading financial institution, boasts a dividend yield of 17%. The bank paid a total dividend of Sh45 per share in 2024, including an interim dividend of Sh8, resulting in a payout of Sh10.9 billion.

This reflects the banking sector’s dominance, with listed banks accounting for nearly half of all NSE dividends last year.

StanChart’s strong performance is driven by Kenya’s resilient banking sector, which has benefited from high interest rates and improved loan recovery.

Investors looking for stability and high dividends will find StanChart a compelling option.

3. BAT Kenya: 13.5% Dividend Yield

British American Tobacco (BAT) Kenya delivers a steady dividend yield of 13.5%. The tobacco giant benefits from stable cash flows, allowing it to maintain consistent dividends despite regulatory pressures in the industry.

Its yield has remained competitive, with earlier reports from January and February 2024 also noting a yield of 13.41%.

BAT Kenya is a reliable choice for investors seeking predictable income from a defensive sector, though regulatory risks should be monitored.

4. KenGen: 13.3–15.3% Dividend Yield

Kenya Electricity Generating Company (KenGen) offers a dividend yield of 13.29%. KenGen’s financial performance has been strong, with a 38% pretax profit increase to Sh8.53 billion for the year ended June 2023, driven by a 14% revenue rise.

The company paid a final dividend of Sh0.65 per share in 2024, and its stock price climbed 31.1% to Sh4.13 by October 2024, adding Sh6.5 billion to its market cap.

KenGen’s high yield is partly due to a depressed share price, making it a high-risk, high-reward option for investors bullish on Kenya’s energy sector.

5. BK Group: 12.2% Dividend Yield

BK Group, a financial services firm, rounds out the top performers with a dividend yield of 12.2%. The company distributed Sh3.3 billion in dividends for 2023, reflecting the banking sector’s strong contribution to NSE payouts.

BK Group’s consistent performance and high yield make it an attractive choice for investors seeking exposure to Kenya’s financial sector.

Why Are Kenyan Dividend Yields So High in 2025?

Several factors contribute to the high dividend yields observed in 2025:

1. Improved Corporate Earnings: Companies like KenGen and StanChart have reported significant profit growth, enabling higher dividend payouts. For instance, KenGen’s 38% profit surge in 2023 supported its generous dividends.
2. Depressed Share Prices: Low stock prices, as seen with KenGen and Umeme, inflate dividend yields, making these stocks appear more attractive. However, this also signals potential risks if prices remain volatile.
3. Declining Treasury Bill Rates: In early 2024, Treasury bill rates exceeded 16%, outpacing most dividend yields. By April 2025, the 91-day T-bill rate dropped to 8.46%, making high-yield stocks more competitive.
4. Banking Sector Strength: Banks like StanChart and BK Group have capitalised on high interest rates and improved loan portfolios, driving substantial dividend payouts.

Risks to Consider When Investing in High-Yield Stocks

While high dividend yields are enticing, they come with risks:

• Share Price Volatility: High yields often result from low share prices, which may reflect underlying challenges. For example, Umeme’s loss of monopoly rights in Uganda could limit future growth.
• Currency Fluctuations: A March 2025 Reuters report highlighted currency risks affecting dividend repatriation for foreign investors, which could impact returns.
• Sector-Specific Challenges: Regulatory pressures in the tobacco industry (BAT) or infrastructure constraints in the energy sector (KenGen, Umeme) could affect long-term performance.
• Sustainability of Dividends: High yields may not be sustainable if companies face declining profits or cash flow issues.

Investors should conduct thorough research and consider diversifying their portfolios to mitigate these risks.

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How to Invest in High-Yield Kenyan Stocks

To capitalise on these opportunities, follow these steps:

1. Open a Brokerage Account: Work with a licensed NSE broker to access listed stocks like Umeme, StanChart, BAT, KenGen, and BK Group.
2. Research Financial Reports: Review company annual reports and NSE filings for up-to-date dividend and performance data.
3. Monitor Market Trends: Stay informed about share price movements and Treasury bill rates, as these directly impact yields.
4. Consult a Financial Advisor: Seek professional advice to align your investments with your risk tolerance and financial goals.

 A Golden Opportunity for Income Investors

In 2025, Kenyan companies are offering some of the highest dividend yields in the region, outpacing Treasury bills and providing a compelling alternative for income-focused investors.

However, investors must weigh the rewards against risks like share price volatility and sector-specific challenges.

Disclaimer: Investing involves risks, and past performance does not guarantee future results. Always conduct your own research or consult a financial advisor before making investment decisions.

Ronnie Paul is a seasoned writer and analyst with a prolific portfolio of over 1,000 published articles, specialising in fintech, cryptocurrency, and digital finance at Africa Digest News.