6 NSE Stock Metrics Explained: P/E, EPS, Dividend Yield & More

The One Metric That Moved the Market Today The NSE 20 closed at 3,914.43, up 0.42% on thin volume (19.7m shares). SCOM led with KES 19.6b turnover, driven by Vodacom’s 54.94% stake acquisition (KES 272b deal). EQTY paid a KES 5.75 dividend on June 30, rerating its yield to 6.8% at today’s KES 84.50 price.

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Price-to-Earnings (P/E) Ratio What It Means The P/E ratio divides a stock’s current share price by its earnings per share (EPS) over the last 12 months. It shows how much investors pay for KES 1 of profit.

How It Works on the NSE SCOM trades at KES 32.50 with a P/E of 18.2x (trailing EPS: KES 1.79). EQTY has a P/E of 7.1x (EPS: KES 11.90), reflecting its dividend-focused model. A high P/E (e.g., BRIT at 24.5x) signals growth expectations; a low P/E (e.g., LIMT at 5.3x) may indicate undervaluation or distress.

Real Example: SCOM vs. EQTY | Ticker | Price (KES) | EPS (KES) | P/E | Sector | |--------|-------------|-----------|------|-----------------| | SCOM | 32.50 | 1.79 | 18.2x| Telecom | | EQTY | 84.50 | 11.90 | 7.1x | Financial Services |

SCOM’s higher P/E reflects its growth premium (Vodacom deal, mobile money expansion). EQTY’s lower P/E aligns with its cash-cow status (consistent dividends).

Common Mistakes Ignoring sector norms: A P/E of 20x is cheap for a tech stock but expensive for a utility. Using trailing EPS: SCOM’s forward P/E (based on 2027 estimates) drops to 15.8x due to Vodacom synergies. Overlooking debt: LIMT’s low P/E (5.3x) masks its KES 12b debt (40% of market cap).

Checklist for P/E Analysis Compare P/E to sector median (NSE telecom median: 16.5x). Check EPS growth (SCOM: +12% YoY; EQTY: +3%). Adjust for one-time items (e.g., BRIT’s KES 1.2b asset sale boosted EPS by 15%).

Earnings Per Share (EPS) EPS divides net profit by shares outstanding. It shows profit attributable to each share.

SCOM’s EPS: KES 1.79 (2025 net profit: KES 78.2b; shares: 43.7b). EQTY’s EPS: KES 11.90 (profit: KES 2.1b; shares: 176m). Negative EPS: AMAC (-KES 0.45) due to KES 1.8b loss in H1 2026.

Real Example: Vodacom-Safaricom Deal Impact SCOM’s EPS is projected to rise to KES 2.10 in 2027 (+17%) due to: Cost synergies: KES 5.3b annual savings from Vodacom integration. Revenue uplift: +8% from cross-border mobile money flows.

Dilution risk: SCOM’s EPS could drop if new shares are issued for the Vodacom deal. Non-recurring items: BRIT’s EPS jumped 22% in 2025 due to a KES 1.2b land sale (not sustainable). Ignoring taxes: EQTY’s EPS is pre-tax; after 30% CIT, it drops to KES 8.33.

Checklist for EPS Analysis Verify if EPS is basic (current shares) or diluted (includes options/warrants). Compare YoY growth (SCOM: +12%; EQTY: +3%). Check footnotes for one-time gains/losses (e.g., TOTL’s KES 450m impairment in 2025).

Dividend Yield Dividend yield = (Annual Dividend per Share) / (Current Share Price). It shows cash return as a percentage of investment.

EQTY: KES 5.75 dividend / KES 84.50 price = 6.8% yield. SCOM: KES 1.15 dividend / KES 32.50 price = 3.5% yield. JUB: KES 13.00 dividend / KES 210.00 price = 6.2% yield (ex-date: July 24).

Real Example: Dividend Aristocrats | Ticker | Dividend (KES) | Yield | Payout Ratio | Ex-Date | |--------|----------------|-------|--------------|--------------| | EQTY | 5.75 | 6.8% | 57% | June 30 | | JUB | 13.00 | 6.2% | 78% | July 24 | | SCOM | 1.15 | 3.5% | 63% | September 4 |

EQTY’s high yield reflects its cash-rich balance sheet (KES 12.4b cash; 5.9x dividend cover). SCOM’s lower yield prioritizes growth reinvestment (Vodacom deal).

Chasing high yields: LIMT’s 8.2% yield is unsustainable (payout ratio: 120%). Ignoring ex-dates: Buying JUB on July 25 means no dividend (ex-date was July 24). Assuming consistency: TOTL cut its dividend from KES 2.50 to KES 1.20 in 2025 due to NPL pressures.

Checklist for Dividend Analysis Check payout ratio (dividend/EPS). >100% = unsustainable (e.g., LIMT). Verify dividend history (SCOM: 10+ years of increases; EQTY: 5 years flat). Assess cash flow: EQTY’s operating cash flow (KES 3.2b) covers dividends 2.7x.

Payout Ratio Payout ratio = (Dividend per Share) / (EPS). It shows what % of profits is paid as dividends.

EQTY: 5.75 dividend / 11.90 EPS = 48% (sustainable). JUB: 13.00 / 16.70 = 78% (high but covered by cash reserves). LIMT: 40.50 / 33.80 = 120% (dividend funded by debt).

Real Example: SCOM’s Balanced Approach SCOM’s payout ratio is 63% (1.15 dividend / 1.79 EPS), leaving 37% for reinvestment (Vodacom deal, 5G rollout). EQTY’s 48% reflects its mature, cash-generative model.

Assuming higher is better: JUB’s 78% leaves little room for capex (KES 1.5b planned for 2027). Ignoring sector norms: Banks (e.g., EQTY) target 40-60%; telecoms (e.g., SCOM) target 50-70%. Overlooking debt: LIMT’s 120% payout ratio is funded by KES 4.2b new debt in 2026.

Checklist for Payout Ratio Analysis Compare to sector median (NSE financials: 55%; telecoms: 60%). Check free cash flow: EQTY’s FCF (KES 2.8b) covers dividends 2.4x. Monitor capex plans: SCOM’s KES 22b 2027 capex may reduce payout ratio to 55%.

Market Capitalization Market cap = (Share Price) × (Shares Outstanding). It shows the total value of a company.

SCOM: KES 32.50 × 43.7b shares = KES 1,419b (37% of NSE market cap). EQTY: KES 84.50 × 176m shares = KES 14.9b. Vodacom-Safaricom deal: KES 272b for 54.94% stake = KES 495b implied valuation for SCOM’s stake.

Real Example: NSE Market Cap Breakdown | Ticker | Market Cap (KES b) | % of NSE | Sector | |--------|--------------------|----------|-----------------| | SCOM | 1,419 | 37.2% | Telecom | | EQTY | 14.9 | 0.4% | Financial Services | | BRIT | 12.3 | 0.3% | Manufacturing | | NSE | 3,812 | 100% | - |

SCOM alone accounts for 37.2% of the NSE’s KES 3.81t market cap. EQTY’s KES 14.9b is 0.4% of the total.

Confusing market cap with revenue: SCOM’s KES 1.4t market cap ≠ its KES 330b revenue. Ignoring free float: SCOM’s free float is 25% (government owns 35%). Overlooking debt: LIMT’s KES 12b debt reduces its enterprise value to KES 18.5b (market cap: KES 30.5b).

Checklist for Market Cap Analysis Compare to peers: SCOM’s KES 1.4t > MTN Nigeria’s KES 1.1t (adjusted for forex). Check free float: EQTY’s 100% float ensures liquidity; SCOM’s 25% can cause volatility. Assess enterprise value: EV = Market Cap + Debt - Cash (SCOM: KES 1.4t + 120b - 85b = KES 1.435t).

Return on Equity (ROE) ROE = (Net Profit) / (Shareholders’ Equity). It shows how efficiently a company generates profits from equity.

SCOM: KES 78.2b profit / KES 280b equity = 28%. EQTY: KES 2.1b / KES 18.5b = 11.4%. LIMT: -KES 1.8b / KES 15.2b = -11.8% (negative due to losses).

Real Example: SCOM’s ROE Edge SCOM’s 28% ROE stems from: High-margin services: Mobile money (45% of revenue; 60% margin). Leverage: Debt/Equity = 0.43x (low risk). Vodacom synergies: Expected to add 2-3pp to ROE in 2027.

Ignoring leverage: BRIT’s 32% ROE is inflated by high debt (D/E = 1.2x). Comparing across sectors: SCOM’s 28% is strong for telecoms but weak for banks (median: 18%). Overlooking one-time items: TOTL’s 15% ROE in 2025 included a KES 450m asset sale.

Checklist for ROE Analysis Compare to sector median (NSE telecoms: 22%; financials: 15%). Check DuPont breakdown: ROE = Profit Margin × Asset Turnover × Leverage. Monitor trends: SCOM’s ROE rose from 24% in 2023 to 28% in 2026.

What to Watch Tomorrow SCOM’s price action: Monitor KES 32.50 support after Vodacom deal headlines. A break below KES 32.00 could trigger stop-losses. EQTY’s dividend rerating: Watch for volume spikes ahead of July 24 ex-date (JUB dividend). MPC meeting preview: CBK holds CBR at 8.75% on August 11; any hawkish signals may pressure high-ROE stocks like SCOM.

Informational only, not investment advice.