Nearly half of Nairobi Securities Exchange (NSE) listed firms did not pay dividends in the last financial year cycle revealing muted returns for investors in the bourse.Market data shows 28 of 59 listed companies with ongoing operations did not pay dividends for their latest respective financial years, with some extending their payout drought to years.The lack of cash distributions at firms like Kenya Airways, HF Group, Home Afrika and WPP Scan group have exposed investors to major losses as their share prices have declined significantly.The stocks of a few of the companies such as Olympia Capital have registered price gains over the past 12 months.In general, however, those not paying dividends have in the long term burnt investors and underperformed their peers like BAT Kenya and Safaricom which are among the most consistent in making cash distributions to shareholders.READ: NSE firms with highest dividend payoutsOther zero-dividend firms include Eaagads, Eveready East Africa, Express Kenya, Homeboyz, Longhorn Publishers, NBV, Sameer Africa, Standard Group, TPS Eastern Africa, Uchumi Supermarkets and East African Cables.East African Portland Cement Company (EAPCC), Kenya Power, Britam Holdings, CIC Group, Liberty Kenya, Sanlam Kenya, Kurwitu Ventures, Transcentury, Flame Tree, Kenya Orchards, Mumias Sugar Company and Unga completes the list of the nil-dividend counters.The list excludes Deacons East Africa and ARM Cement which suffered insolvency and liquidation respectively.The lack of dividends from the 28 firms means that their shareholders are relying on capital gains as the only source of returns.Buying into non-dividend paying counters at the NSE is largely seen as a speculative venture with the market still trading below the last bull run peak seen in early 2015.“Ideally, you are supposed to buy shares at their discount value. The challenge for our market, however, is the limited room for price discovery with limited market participants, especially in current times where foreign investors have retreated from the market,” noted a market analyst.In more advanced markets, however, many firms opt to skip dividends and instead re-invest their profits and register gains through share price discovery.At the same time, the non-dividend paying counters largely consist of firms persistently returning losses or those striving to stay in the green.National carrier Kenya Airways which is suspended from the NSE, but continues to operate, has, for instance, remained in the loss-making territory over recent years while Kenya Power, Sanlam and Britam have been striving to churn a profit with years of swings into loss-making.READ: NSE shrugs off record earnings and dividendsThe lack of dividends from half of the listed firms has been depressing for some investors such as retirees who would largely be reliant on dividends paid out by their investments for income.Some of the companies like Kenya Power have not declared dividends despite recovering to post profits, indicating that they still require more capital.→ kmuiruri@ke.nationmedia.com