Investment Opportunities: The Top 5 Dividend Paying Stocks on the NSE You Need to Know

Dividend paying stocks are a great way for investors to earn a steady stream of income while also holding on to their shares. These stocks tend to be more stable and reliable than those that do not pay dividends, making them a popular choice among investors. In this article, we will take a look at the top 10 dividend paying stocks in the Nairobi Stock Exchange (NSE). These stocks have been selected based on their dividend yield, dividend history, and overall performance in the market. They are a great option for investors looking to add some income-producing stocks to their portfolio.

1. Umeme

Investing in Umeme — the Ugandan equivalent of KPLC — is a smart move for anyone looking to earn a steady stream of income. The company has a track record of consistently rewarding its investors with solid dividends, and the latest FY saw them pay out a dividend of Ksh. 1.70 per share, yielding an impressive 24.79%. This means that, even without taking into account any potential growth in share price, an investor could break even in just five years. And it’s not just dividends that make Umeme a great investment — the company’s shares have been performing exceptionally well on the bourse, with a 14% appreciation this year alone and a whopping 30% increase in the past 12 months. That’s a profit of 54.79% for anyone who invested in Umeme shares in the last year.

2. Williamson Tea Kenya PLC

WTK is a company with a rich history and a bright future. Established in 1869, they are one of the oldest companies in Kenya, specializing in the cultivation, manufacture, and sale of tea. The last FY saw them offer an average dividend yield of 13.33%, making them a great choice for investors looking for steady income. But that’s not all — WTK’s share prices have a tendency to rise during the June to August period, which can be attributed to increased sales during the cold seasons. However, it’s worth noting that experts are warning of dry seasons ahead due to low rainfall in the last rainy season, and any company in the agriculture sector may be affected. Nevertheless, if you’re looking for solid investments in the agriculture sector, WTK is a great choice, along with other companies such as Sasini Ltd, Kapchorua Tea, Limuru Tea, and Kakuzi PLC.

3. Standard Chartered Bank Kenya

SCBK is one of the top banks in Kenya, ranking 6th by market capitalization. Their shares are currently trading at Ksh 155 per share, which represents an impressive 18.5% increase in the past 12 months. This bank has been a great choice for investors seeking steady income, with an average dividend yield of 13.10% last year, making it the third highest in NSE. With the resumption of bank to mobile transaction costs, banks are expected to see a boost in revenue which may lead to an appreciation in share prices. In other words, by investing in SCBK, you’re not only getting a reliable source of income, but also the potential for growth in the future.

4. BAT

BAT is in the business of manufacture and sale of cigarretes and tobacco. The company garnered a dividend yield of 12.36% which was the fourth highest on the bourse. However, their share prices have been quite slow in appreciation as we are only seeing 2.85% increase over the past 1 year.

5. Crown Paints PLC

This company is a dividend investor’s dream come true. With a payout of Ksh 4 per share, they offer a generous yield of 11.89%, making it the fifth highest in NSE. But that’s not all — the stock has also seen a significant price gain of 11.60% in the past 12 months. This means that not only are you earning a steady stream of income from dividends, but you’re also seeing your investment grow in value.

In conclusion, dividend paying stocks are a great way for investors to earn a steady stream of income while also holding on to their shares. In this article, we’ve highlighted the top 5 dividend paying stocks in the Nairobi Stock Exchange (NSE) based on their dividend yield, dividend history, and overall performance in the market. From Umeme, a Ugandan energy distribution company, to Williamson Tea Kenya PLC, a company with a rich history in the tea industry, to Standard Chartered Bank Kenya, one of the top banks in the country, to BAT, a manufacturer and seller of cigarettes and tobacco, to Crown Paints PLC. These stocks are a great option for investors looking to add some income-producing stocks to their portfolio.

Always do your own research and consult with a financial advisor before making any investment decisions.