Equities are among high return paying assets in a time when interest rates continue to narrow down supported by low inflations. This is even as return on investment from equities remain stable and rising as the business environment improves on low cost of financing. In the first half of 2025, the local stocks were up 22.4% on average, implying a return of above 20% for investors who invested earlier in the year. As such we have identified the following stocks for your investment considerations:
KCB Group – Long-term Buy
Trading at KES 47.50 per share as of 25th July 2025, the Bank has gained 25.0%, 9.7% and 37.1% in the last 3-, 6- and 12-months respectively. Its average price for the same period stands at KES 42.57, KES 42.89 and KES 39.45 per share, respectively.
In 2025, KCB Group recorded a high of KES 47.50 on 25th July 2025 and a low of KES 35.30 on 9th April 2025.
The Group’s price performance remains supported by its better financial performance projections for 2025, sale of National Bank of Kenya (NBK) and the recent interest in entering the Ethiopia market. The NBK sale saw the Group’s asset and capitalization quality which can support entry to the new market.
On its FY2025 financials, we expect the counter to improve its dividend payout ratio which will further its price upwards.
We retain a BUY recommendation on the Bank’s share price with a valuation price of KES 54.00 per share, representing a 13.7% upside from the current price.
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Safaricom – Long-Term Buy:
Trading at KES at KES 26.90 per share as of 25th July 2025, the giant telco’s price has improved 53.7%, 47.4% and 58.2% in the last 3-, 6-, and 12-months strongly supported by its FY-2025 financials and Safaricom Ethiopia developments. The price surge mainly emanated from its Ethiopia update where a 3-months active subscriptions surpassed the 10- million mark, which continue to push the price valuation upwards.
On its financials for the year ending 31st March 2025, Safaricom plc reported a 10.1% rise in profits before tax from KES 84.69BN in FY2024 to KES 93.21Bn in FY2025, supported by an 11.2% rise in total revenues from KES 349.45BN to KES 388.69Bn. Profits after tax went up 7.3% to KES 45.76Bn being impacted by Safaricom Ethiopia loss. Safaricom Kenya, however, reported a stellar growth of 11.6% in PBT to KES 142.95Bn and a 10.9% rise in PAT to KES 95.50Bn.
In announcing the results, Safaricom Ethiopia breakeven projections are retained for March 2027 even as the subsidiary doubled customer subscription to over 8.8Mn with a 50% population coverage in the reporting period. Thereafter, we expect returns to drive Safaricom prices up and consequently investor returns. We also expect the management to review upwards its dividend payout from the current 69% to its policy requirement of 80% of its earnings per share. Its KES 0.65 per share final dividend book closure will happen on 31st July for a payment on 31st August 2025 (total divided – KES 1.20 per share both 2024 & 2025).
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I&M Group – Buy
Trading at KES 36.90 per share on 25th July 2025, representing a 12.7%, 8.5% and 70.4% rise in the last 3-, 6- and 12-months respectively. Its average price in the last 3-, 6- and 12-months are KES 33.50, KES 33.98 and KES 30.18 per share respectively.
The Bank has maintained an upward trajectory on its financial performance, recording a 17.3% spike in its net revenues to KES 4.22Bn in Q1-2025. The Bank embarked an ambitious branch network in 2024 with an aim of expanding its retail business. In 2024, the Bank opened 23 new branches which we expect to contribute to its retail income which remains the cake and batter for the banking industry.
On its last price valuation for the newly issued 85.6Mn shares, the Bank priced its share price at KES 48.15 per share, 30.5% upside. We issue a BUY recommendation with a price target of KES 42.00 per share in the next six to twelve months.
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HF Group – Long-term Buy
Trading at KES 7.84 per share as of 25th July 2024, the Group has made great strides on its effort to improve shareholder returns. Its 12-month high and low prices stands at KES 9.42 and KES 3.67 per share respectively.
The Group returned to profitability in 2022 when it reported a profit before tax (PBT) of KES 190.40Mn, immediately after its major shareholder, Britam Holdings, injected KES 1.00 billion as capital injection. In 2023, HF Group reported KES 334.78Mn, which grew to KES 459.99Mn in FY 2024. As of Q1- 2025, the Bank reported a PBT of 336.52Mn, representing a 112.1% jump from that of KES 158.67Mn announced in Q1-2024.
In its rights issue of December 2024, a total of KES 6.38Bn was subscribed and accepted against a KES 4.62Bn target. We expect this to position the company for growth especially in expanding its retail banking business for better investor returns.
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Britam – Long-term Buy
Trading at KES 8.44 per share as of 25th July 2025, the risk insuring company continue to return to its pre-covid performances. In the last 12-months, the company recorded its new high of KES 8.54 per share on 21st July 2025 from a low of KES 5.40 on 3rd September 2024.
In FY2024, Britam reported a 52.1% jump on its PBT to KES 7.33Bn in relation to KES 4.82Bn reported similar period in FY2023. Its profits after tax (PAT) were up 53.5% from KES 3.28Bn to KES 5.03Bn to give rise to a similar rise on its earnings per share from 1.29 to KES 1.98. The company however didn’t issue any dividend of which we expect resumption in 2025 after 5-years of none.
Britam commands the largest market share of 22% in the life assurance sector which contributes over 25% of the sector revenue. In general insurance, Britam occupies third position with a market share of 8.6% as of Q4-2024. In fund administration Britam stands at fifth position with a market share of 6.9%.
