As the European Central Bank continues to navigate through interest rate adjustments amidst signs of weakening economic growth and slowing inflation, investors are increasingly looking for stable income sources in the Swedish market. In this context, dividend stocks offer an attractive proposition, combining potential capital appreciation with regular income. A good dividend stock typically boasts a strong balance sheet and consistent earnings, making it resilient during periods of economic uncertainty. Here are three Swedish dividend stocks to consider that offer yields up to 5.2%.
Overview: Avanza Bank Holding AB (publ) and its subsidiaries provide various savings, pension, and mortgage products in Sweden, with a market cap of SEK37.52 billion.
Operations: Avanza Bank Holding AB (publ) generates revenue primarily from its commercial operations, amounting to SEK3.96 billion.
Dividend Yield: 4.8%
Avanza Bank Holding's dividend payments have been volatile over the past 10 years, though they have increased overall. The current payout ratio of 87.3% indicates dividends are covered by earnings, and a cash payout ratio of 55.8% suggests coverage by cash flows is also sustainable. Despite its top-tier dividend yield (4.82%), recent growth in customer base and net inflows highlight operational strength, but investors should remain cautious due to the unstable dividend history.
Overview: Knowit AB (publ) is a consultancy company that develops digital solutions, with a market cap of SEK4.55 billion.
Operations: Knowit AB (publ) generates revenue through four primary segments: Insight (SEK898.95 million), Solutions (SEK3.90 billion), Experience (SEK1.44 billion), and Connectivity (SEK1.02 billion).
Dividend Yield: 3.1%
Knowit AB's recent earnings report showed a decline in both revenue (SEK 1.68 billion) and net income (SEK 3 million) for Q2 2024 compared to the previous year. The company's dividend payments have been volatile over the past decade, though they have increased overall. Despite a relatively low dividend yield of 3.13%, dividends are covered by earnings (77.3% payout ratio) and cash flows (41.6% cash payout ratio), suggesting sustainability amidst financial fluctuations.
Overview: Solid F?rs?kringsaktiebolag (OM:SFAB) offers non-life insurance services to private and business customers across several countries, including Sweden, Denmark, Norway, Finland, Germany, Switzerland and internationally with a market cap of SEK1.58 billion.
Operations: Solid F?rs?kringsaktiebolag (OM:SFAB) generates revenue from three main segments: Product (SEK320.51 million), Assistance (SEK351.63 million), and Personal Safety (SEK435.09 million).
Dividend Yield: 5.2%
Solid F?rs?kringsaktiebolag's recent earnings report indicates steady growth, with net income for Q2 2024 at SEK 40.95 million, up from SEK 39.21 million a year ago. The company has initiated share buybacks to enhance capital structure and shareholder value. While its dividend yield is among the top 25% in Sweden, it’s too early to judge reliability due to the recent start of dividend payments. Dividends are well-covered by both earnings (49.1% payout ratio) and cash flows (73.7% cash payout ratio).
Shareholder in one or more of these companies? Ensure you're never caught off-guard by adding your portfolio in Simply Wall St for timely alerts on significant stock developments.
Discover a world of investment opportunities with Simply Wall St's free app and access unparalleled stock analysis across all markets.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include OM:AZA OM:KNOW and OM:SFAB.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]
