Safaricom Shares Analysis 2026: Why Are the NSE Investors Still Watching?

Over the past quarter, one stock has consistently dominated investor attention on our platform: Safaricom. From first-time retail investors to seasoned dividend-focused portfolio builders, no other counter on the Nairobi Securities Exchange (NSE) has attracted as much sustained interest. That raises the question every investor should ask: Is Safaricom’s popularity still supported by fundamentals, or is the market simply rewarding familiarity? The answer matters because Safaricom is no longer just another telecom company. It has become the anchor stock of the NSE, a proxy for Kenya’s digital economy, and one of the most important dividend and fintech stories in Africa.

In this analysis, we break down the variables that matter most to investors market capitalization, M-PESA’s competitive moat, dividend strength, valuation, and the high-stakes Ethiopia expansion story.

What is Safaricom?

Safaricom Plc is Kenya’s largest telecommunications and technology company, providing voice, SMS, mobile and fixed data, internet, and M-PESA financial services across East Africa. Its distribution network spans over 2,700 dealer outlets, and it has been listed on the Nairobi Securities Exchange under the ticker SCOM since June 9, 2008.

What makes it different from a typical telco is simple: Safaricom is not just a communications business. It is, to a significant degree, a financial infrastructure company one that millions of Kenyans use daily to send money, save, borrow, and pay for goods and services. That distinction matters enormously for investors.

Safaricom’s Market Dominance and Liquidity

With a market capitalization of KES 1.14 trillion, Safaricom is not just the largest stock on the NSE it accounts for approximately 34.3% of the entire exchange’s equity market value. That level of dominance is almost unheard of in any developed market. For investors, it translates into three practical advantages: stronger liquidity, higher foreign institutional interest, and easier entry and exit compared to any other counter on the NSE.

The free float available to public investors stands at 25% of issued shares with 40.07 billion shares outstanding, that represents a substantial volume of tradable stock, which reduces the risk of being caught in illiquid positions.

Safaricom accounts for 34.3% of the entire NSE’s equity market value a level of dominance that almost guarantees institutional relevance for any serious Kenyan portfolio.

M-PESA: The Real Investment Story

It is impossible to analyse Safaricom without understanding M-PESA, because this is where the company’s real competitive moat lies. What began as a mobile money transfer platform has evolved into a full financial ecosystem spanning payments, merchant services, savings, credit, insurance, cross-border transfers, and investment rails.

Today, M-PESA contributes roughly 45% of Safaricom’s service revenue, making it one of the most important profitability engines in the business. In FY2025, M-PESA generated KES 161 billion in revenue accounting for over 40% of total group service revenue. That makes it not just Safaricom’s largest business line, but one of the most valuable fintech platforms on the entire continent. Its network effects are so deeply embedded in daily Kenyan economic life that meaningful displacement by a competitor is, at this point, a theoretical concern rather than a practical one.

For investors, this matters because M-PESA creates deep customer stickiness, network effects, recurring revenue, strong barriers to entry, and cross-selling opportunities into wealth and lending.

The underlying business metrics justify the attention. In FY2025:

• Total group revenue reached KES 389 billion up 11.2% year-on-year
• Net profit grew 10.8% to KES 69.8 billion
• The Kenya business EBITDA margin stands at 54% among the most efficient telecom operators on the continent
• The group’s customer base grew 16.4% to 57 million subscribers

These are not one-off figures. They reflect a company with genuine pricing power, a sticky and growing customer base, and a cost discipline that has improved operating margins despite the significant drag of its Ethiopian expansion. The group EBITDA margin stands at 49.8%, and over the past five financial years, Safaricom has consistently delivered double-digit growth in core earnings.

Dividend Income: A Reliable Income Stream

For many long-term investors on the NSE, Safaricom’s dividend is one of its strongest attractions. Over the past five years, the company has returned more than KES 255 billion to shareholders in cumulative dividends.

The FY2025 pay-out stood at KES 1.20 per share, translating to a dividend yield of roughly 5.3% at current prices above the bottom quartile of NSE dividend payers (3.16%) and notably higher than most fixed-income alternatives in the current rate environment. The pay-out ratio of approximately 71% is high enough to meaningfully reward shareholders but disciplined enough to leave sufficient capital for investment in network infrastructure and the Ethiopian expansion. Dividend payments have grown consistently over the past decade and are well covered by earnings.

Valuation: Trading at a Historical Discount

At a trailing price-to-earnings ratio of 13.3 times (current price KES 28.50 vs. EPS of KES 2.07), Safaricom is trading 24% below its own 10-year median P/E of 17.6 times. Analysts broadly attribute this discount not to any deterioration in the core Kenya business, but to the earnings drag from the Ethiopian operation which is temporary by nature.

As Ethiopian losses continue to narrow falling 20% year-on-year in H1 FY2026 and on a trajectory toward breakeven by FY2027 the market expects a meaningful earnings re-rating. The forward P/E of 12.2 times further underscores the value on offer for a patient investor. Analysts’ consensus across considers it a buy, with price targets ranging from KES 34 to KES 44. At the midpoint (KES 39), that implies approximately 37% upside from today’s price of KES 28.50 over a 12-month horizon.

The market is discounting Safaricom for a problem Ethiopia that is already improving. Investors who wait for the headlines to turn positive may find the share price has already moved.

The bigger question is whether Ethiopia’s losses can narrow fast enough to preserve this dividend reliability over the medium term.

Ethiopia: Risk or the Biggest Unpriced Opportunity?

Ethiopia is the part of the Safaricom story that divides opinion, but it increasingly reads as a growth option rather than a liability. The headwinds are real: currency devaluation following the July 2024 float, regulatory friction with the state-owned Ethio Telecom incumbent, and ongoing challenges repatriating capital. These have pushed the breakeven target back to FY2027, a year later than originally projected.

But consider the underlying opportunity. Ethiopia is a country of over 120 million people with mobile internet penetration of just 21%. Safaricom has already grown its active Ethiopian customer base to over 11 million users, with service revenue more than doubling year-on-year. The EBIT loss narrowed from KES 37 billion in H1 FY2025 to KES 24.3 billion in H1 FY2026, a 34% improvement in twelve months. The thesis is not that Ethiopia is easy. It is that when a company with Safaricom’s execution track record and M-PESA’s network capabilities eventually achieves scale in Africa’s second-most populous country, the returns could be transformational for the group.

Ownership: A Vote of Confidence from Vodacom

The recent ownership reshuffle adds an important dimension to the investment case. Vodacom Group has increased its stake to 55% acquiring 15% from the Kenyan government at KES 34 per share, a material premium to where the stock was trading at the time. A globally listed telecommunications group paying a premium to increase exposure is, by most measures, as strong an endorsement as a listed company can receive.

The Kenyan government retains a 20% strategic stake and continues to appoint two directors to the board, providing governance continuity. Crucially, Vodacom has committed to maintaining Safaricom’s NSE listing and to retaining Kenyan leadership at chairman and independent director level. Public investors retain 25% of the company.

For minority shareholders, the shift to a majority owner raises legitimate questions about long-term dividend policy and capital allocation priorities. These are worth monitoring but the track record of both Safaricom’s management and Vodacom’s stewardship of its African assets provides reasonable grounds for confidence.

Key Risks to Consider

No investment case is complete without an honest assessment of risk. Beyond Ethiopia, investors should keep the following in mind:

• Regulatory risk: Safaricom operates in a politically sensitive sector. Any changes to M-PESA licensing, data regulation, or mobile money taxation in Kenya could be material.
• Fintech competition: While M-PESA’s moat is wide, the rise of bank-backed mobile wallets and pan-African fintech players represents a longer-term competitive watch point.
• Currency exposure: Safaricom’s Kenya revenues are in Kenyan shillings. Foreign investors absorb KES/USD exchange rate risk on both capital and dividends.
• Vodacom majority control: With 55% ownership, Vodacom can now pass ordinary resolutions without minority support. Dividend policy, related-party transactions, and capital allocation decisions deserve scrutiny going forward.
• Valuation ceiling: Some fair-value models (including Guru Focus’s GF Value of KES 21.43) suggest the current price already prices in some of the Ethiopia recovery. The safety margin is narrower than it was twelve months ago.

Is Safaricom Still Undervalued in 2026? Is the current price still attractive, or has the market already priced in the good news?

At a trailing P/E ratio of 13.3x, Safaricom currently trades below its 10-year median valuation multiple of 17.6x. That discount suggests the stock is still being priced with caution, largely because Ethiopia continues to weigh on group earnings. If Ethiopia moves toward breakeven by FY2027 as management expects, the market may begin to re-rate Safaricom closer to its historical multiple range. For patient investors, the present discount may still offer an attractive entry point but only if the Ethiopia thesis remains on track.

Is Safaricom Still Worth Watching?

Safaricom remains the most followed stock on our platform because it combines market leadership, dividend consistency, deep liquidity, a powerful fintech moat, and a high-upside regional expansion story.

The real investment decision is no longer about whether Safaricom is a great company.

The more important question is whether the current valuation still leaves enough room for future returns. For conservative investors, Safaricom still stands out as a core portfolio compounder.

For more aggressive investors, the opportunity lies in identifying whether the market is under-pricing Ethiopia’s optionality and M-PESA’s expanding ecosystem.

What Do You Think?

Do you believe Safaricom can reclaim KES 34–40 if Ethiopia reaches breakeven by FY2027?

Analyse Safaricom in Real Time

If Safaricom remains the most watched stock on the NSE, the real edge is not just following headlines it is understanding when market sentiment, price action, and fundamentals begin to diverge.

On Urim Traders, investors can track live price movement, demand and supply zones, sentiment shifts, technical levels, and valuation signals before making their next move.