Undervalued Dividend Stocks on the NSE (High Yield, Below Book Value)
Important
Executive Summary:
- The value-investor’s dream is a stock that pays a high dividend yield AND trades below its book value (price-to-book under 1.0). This page screens the NSE analyst-coverage universe for both, as of 29 May 2026.
- Ticking both boxes right now: KCB Group (9.9% yield, 0.70x book), I&M Group (7.1% yield, 0.80x book), Diamond Trust Bank (6.3% yield, 0.40x book).
- “Below book value” (P/B under 1.0x) means the market prices the company at less than its net assets on paper. Paired with a high, well-covered dividend, that can signal a bargain, but always check WHY it is cheap.
Two numbers tell you whether a Kenyan share is a potential bargain for an income investor. The first is the dividend yield: how much cash the company pays you each year as a percentage of the share price. The second is the price-to-book (P/B) ratio: the share price divided by the company’s net assets per share. A P/B below 1.0 means you are paying less than the company’s assets are worth on paper. A stock that scores high on the first and low on the second is the classic value-and-income pick. Here is the current NSE screen.
The undervalued dividend stocks (high yield and below book value)
These covered stocks currently pay a dividend yield of at least 5% and trade below book value (P/TBv under 1.0x), as of 29 May 2026:
| Company | Dividend Yield | Price / Book (P/TBv) | Analyst Call |
|---|---|---|---|
| KCB Group | 9.9% | 0.70x | Buy |
| I&M Group | 7.1% | 0.80x | Accumulate |
| Diamond Trust Bank | 6.3% | 0.40x | Buy |
KCB Group stands out at 9.9% yield on just 0.70x of book value. The cheapest on a book basis is Diamond Trust Bank at 0.40x. Remember a low P/B can also flag a market that doubts the assets or the earnings, so read the analyst call and the company’s results before acting.
The full coverage screen
Every stock in the coverage universe, ranked by dividend yield. The price-to-book column flags those trading below book value (P/TBv under 1.0x).
| Company | Dividend Yield | Price / Book (P/TBv) | Analyst Call |
|---|---|---|---|
| KCB Group | 9.9% | 0.70x (below book) | Buy |
| Standard Chartered Bank | 9.3% | 2.10x | Accumulate |
| NCBA | 8.0% | 1.20x | Buy |
| Co-op Bank | 7.8% | 1.20x | Buy |
| Stanbic Holdings | 7.8% | 1.60x | Accumulate |
| Equity Group | 7.4% | 1.00x | Buy |
| ABSA Bank | 7.1% | 1.60x | Accumulate |
| I&M Group | 7.1% | 0.80x (below book) | Accumulate |
| Diamond Trust Bank | 6.3% | 0.40x (below book) | Buy |
| Jubilee Holdings | 3.8% | 0.50x (below book) | Hold |
| CIC Group | 3.1% | 1.10x | Buy |
| Britam | 0.0% | 0.90x (below book) | Hold |
How to read this screen
- Dividend yield is the income. The highest-yielder in coverage is KCB Group at 9.9%. A very high yield can be a warning (the market expecting a cut), so favour yields backed by steady profits.
- Price-to-book under 1.0x means the shares cost less than the net assets per share. For banks (most of this universe), book value is a meaningful anchor, which is why below-book banks often screen as value.
- The analyst call (Buy / Accumulate / Hold / Sell) is one view, not gospel. Use it as a starting point, then read the company’s own results.
Where this fits for a Kenyan investor
Dividend stocks are a growth-and-income play that sits ABOVE a money market fund on the risk ladder: higher potential return, but real capital risk (share prices fall, dividends get cut). A sensible order is to build a liquid base in a money market fund first, then add carefully-chosen dividend stocks for long-term growth. Compare the yields here to the current MMF rates and remember the Central Bank Rate moves both.
Frequently Asked Questions
What are the best dividend stocks on the NSE right now? As of 29 May 2026, the covered stocks that combine a high dividend yield (5%+) with a price below book value (P/TBv under 1.0x) are: KCB Group (9.9%, 0.70x); I&M Group (7.1%, 0.80x); Diamond Trust Bank (6.3%, 0.40x). Dividend yields and valuations change; always confirm before investing.
What does “trading below book value” mean? A price-to-book (P/B) ratio under 1.0 means the share price is lower than the company’s net assets per share. You are paying less than the on-paper value of the business. It can signal a bargain, or that the market doubts the assets or future profits.
Which NSE stock has the highest dividend yield? In the analyst coverage universe, KCB Group at 9.9% (as of 29 May 2026). A high yield is attractive but check it is sustainable, not a sign the market expects a dividend cut.
Are dividend stocks safer than a money market fund? No. Shares carry real capital risk: the price can fall and the dividend can be cut. A money market fund is far lower risk and stays liquid within 24 hours (up to M-PESA daily limits). Most Kenyans should build the MMF base first, then add dividend stocks for long-term growth.
Keep reading: see the best MMF rates this week, Kenya interest rates today, the Central Bank Rate history, or start with the beginner’s guide.
Source: Cytonn (Equities Universe of Coverage) (https://www.cytonnreport.com/research/sub-saharan-africa-1), as of 29 May 2026. Dividend yield and P/TBv (price to tangible book value) are analyst figures for the coverage universe; they change weekly and are not investment advice. Do your own research. This page is regenerated from that data.
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