End of year stock recommendations
Stock prices have witnessed some volatility to reverse the gains made in the last two months, partly attributed to interim dividend book closures and plus some capital gains sell-offs to cash in on gains made so far.
The ongoing interest rate cuts however continue leave the sector among the earning assets, supported by low cost of borrowing which will in turn drive capital gains and dividend payouts up. This is even as the prevailing low inflation push for improved disposable while the low borrowing rates boost businesses and individual borrowings. As such we recommend the following for your investment considerations:
Safaricom – LONG-TERM BUY:
Trading at KES 28.00 per share as of 18th December 2025, the counter has lost 6.1% from our last recommendation of KES 29.70. Its 12-month high and low price stands at KES 30.50 and KES 17.05 per share, respectively. The counter’s price rallied faster in the last two months supported by the half year 2026 financials, its Ethiopia subsidiary developments among other material actions.
On its half year 2026 financials, Safaricom Group reported a 63.1% surge in its profit before tax (PBT) to KES 55.24Bn supported by higher revenues and the thinning Ethiopia losses.
The counter is set to receive reprieve from loan interest obligations after securing a green bond of KES 20.00Bn that was oversubscribed at 175.7% or KES 41.60Bn, signaling confidence in the counter despite a low coupon of 10.4%. The bond was issued at a lower interest rate in relation to the prevailing market rates and provides room for liquidity raising since coupons are paid semi-annually.
Strategic Government sell of Safaricom was priced at KES 34.00 per share, a 21.4% upside from the current pricing of KES 28.00 but 5.9% below our projected price. We retain our pricing at KES 36.00 per share, a 28.6% capital gain expectation. The price is further expected to be propelled by an interim dividend anticipated for January 2026 as per norm.
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HF Group – Long-term BUY:
Trading at KES 9.46 per share, the Group’s price has lost 8.0% and 5.3% in the last one month and three months, respectively. Its 12-month high and low prices are KES 11.00 and KES 4.05 per share, respectively. Its 1- and 3-months average price stands at KES 9.83 and KES 10.26, respectively. The counter’s price surge remains supported by its return to profitability.
On its Q3-2025 financials, the Group reported a 264.9% spike in profits before tax from KES 312.26Bn to KES 1,139.27Mn continuing unlocking its potential after a capital boost of KES 6.38Bn from a rights issue. This was supported by growths in interest incomes.
The Group is expected to maintain an upward trajectory in profits as it fully unlocks the business potential fronted by the successful rights issue. We expect this to be backed by the Group’s change of business model from a mortgage only to a full retail bank, which is the bread and butter in the same market.
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Britam – Long-term BUY:
Trading at KES 8.82 per share, the insurance holding company has gained 1.8%, 30.9% and 51.5% in the last 3, 6 and 12- months, respectively. The counter ranks top in life insurance with a market share of 22.0% and second in the general insurance space with an 8.0% market share.
The Firm’s financials have remained on a growth trajectory, recording consistent growths since 2021 after the covid ravages. In HY2025, Britam reported a 10.6% growth in insurance revenue and 30.2% jump in net investment income. Profits before tax however slowed down 10.7% from that of KES 2.81Bn in HY-2024 to KES 2.51Bn in HY-2025, on impact of higher insurance expense and reimbursements. Further, its Bank affiliated unit, HF Group executed its turn around successfully with significant profits while regaining its tier 2 status.
We retain a BUY recommendation on the counter with a target price of above KES 10.00, an over 13.4% expected capital returns plus dividends. This will further be bolstered by its expansion plans to the Democratic Republic of Congo.
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I&M Group – BUY:
Trading at KES 42.90 per share on 18th December 2025, the lending Group has lost 6.5% from our last recommendation on impact from the KES 1.50 interim dividend book closure that happened on 15th December 2025. I&M’s price has lost 0.8% in the last three months while gaining 31.8% and 41.6% in the last 6- and 12-months, respectively. Year to date the price has attracted 19.2%.
By end of Q3-2025, I&M Group reported a 25.8% expansion in PBT from KES 14.11Bn to KES 17.75Bn as at Q3-2025, strongly supported by stable and rising interest income, low cost of financing and higher non-funded incomes. Its profit after tax were up 27.4% to KES 12.68Bn resulting in a 15.4% hike in its interim dividend from KES 1.30 to KES 1.50 per share.
Its financial performance remains backed by an ambitious strategy of regional expansion, digital transformation and new growth initiatives backed by its KES 4.19Bn capital injection completed in early 2025, following a successful strategic issuance of 86.50Mn shares valued at KES 48.42 per share. This is in a bid to reap from the local retail market which has proved key for Kenya’s banking sector.
We retain a long-term BUY recommendation on the counter with a fair price of KES 48.42, a 12.9% upside plus a remaining dividend return of above 7.0%, giving a total return of above 19.9%.
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Equity Group – BUY:
Trading at 61.50 per share on 18th Dec. 2025, the lender’s Group’s price has attracted 14.4%, 26.3% and 33.3% in the last 3-, 6- and 12- months, respectively. Its average prices for the last 3-, 6- and 12-months stands at KES 61.27, KES 56.37 and KES 51.76 per share, respectively. The Group recorded a 12-month high and low of KES 69.75 and 42.50 per share, respectively.
On its Q3-2025 financials, the lender posted a 28.5% jump in PBT from KES 51.02Bn in Q3-2024 to KES 65.58Bn in Q3-2025 supported by improved interest incomes and low cost of financing which emanated from the ongoing rate cuts. Profits after tax accelerated up 32.2% y-y from KES 40.94Bn to KES 54.12Bn in Q3-2025 on a lower effective tax rate. Equity Bank Kenya (EBK) subsidiary profit grew faster at 50.3% from KES 23.48Bn in PBT to KES 35.29Bn riding on its digital transformation and the above rate cuts.
We retain a BUY recommendation on the counter’s share price with an implied price of KES 73.32 per share, a 16.1% upside from the current price. Further we expect the counter’s dividend to be reviewed upwards from KES 4.25 in 2025 to above KES 5.00 per share which will prop up the price.
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Stan-Chart – Long-term BUY:
Trading at KES 288.50 per share as of 18th December 2025, the lender’s price has averaged around KES 288.00 in nearly a month now. The Bank’s share price has however, gained 1.1%, 4.4% and in the last 3, 6 land 12-months, while averaging at KES 292.48, KES 301.95 and KES 294.01 in the same period, respectively. It’s 12-month high and low prices are KES 341.50 and KES 261.50 per share, respectively.
Stan-Chart’s price plunged immediately after the announcement of the KES 7 billion pension liability ordered by the court to some former employees. This saw the counter’s price dip 11.6% from KES 334.00 to KES 299.25 in a single day.
On its Q3-30325 financials, the counter reported a 41.2% dip in PBT from KES 22.47Bn in Q3-3024 to KES 13.20Bn in Q3-2025. Profits after tax went down 38.2% to KES 9.79Bn. The Bank’s management alluded to revenue drop and a one-off employee past service cost of KES 2.70Bn.
We review our recommendation to a long-term BUY of about two years at the current pricing of KES 288.50 with a fair price of KES 330.00 per share, a 14.5% capital gain upside plus dividend returns. The company remains profitable and among the best dividend paying stocks with a dividend policy of at least 80.0% of its earnings. This is as the Bank remains well capitalized with sufficient liquidity ratios.
