KenGen tops dividend yields table in Kenya at over 15%
TLDR
- KenGen, a power producer, is currently the top firm on the Nairobi Securities Exchange in terms of dividend yield, with a yield of 15.3%.
- The company's share price has collapsed, resulting in a significant decline from its peak in 2018.
- Despite the challenges faced by long-term investors, those entering the market now can benefit from high dividend returns.
KenGen, a power producer, has emerged as the top firm on the Nairobi Securities Exchange in terms of dividend yield, a measure of cash returns relative to the current stock price. The company's share price collapse has led to a dividend yield of 15.3%, as reflected in Tuesday's closing price of Sh1.99, a significant decline from its peak of Sh9 in early 2018.
Despite the challenges faced by long-term investors who have witnessed substantial paper losses on their KenGen holdings, those entering the market now stand to benefit from the highest dividend returns offered by the company.
In the fiscal year ending June 2023, KenGen distributed a dividend of Sh0.3 per share, attracting the attention of investors seeking lucrative returns in the form of dividends amid the company's reduced stock value.
Key Takeaways
KenGen surpassed Uganda-based electricity distributor Umeme Limited, previously holding the highest dividend yield on the NSE, where it is cross-listed. Umeme's cash return stood at 14.07% on Tuesday, followed by BAT Kenya (13.41%), Standard Chartered Bank Kenya (13.41%), Co-operative Bank of Kenya (13.22%), I&M Group (12.86%), Williamson Tea Kenya (12.85%), and property fund ILAM Fahari I-REIT (12.19%). These companies exhibit the highest cash returns on the NSE, aiding investors in mitigating paper losses amid the general bear run in the market. However, their dividend returns still lag behind the interest rate on Treasury bills, which has surged above 16%, reflecting the impact of risks, such as the weakening of the shilling, faced by fixed-income investors. Despite improved profitability and dividend payout, KenGen's share price decline persists.
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