As global markets react to recent economic developments, including interest rate cuts by the European Central Bank and mixed performance across various indices, investors are increasingly seeking stable returns amidst volatility. In this context, dividend stocks remain a popular choice for those looking to balance income with potential growth. A good dividend stock typically offers consistent payouts and has a strong financial foundation, making it an attractive option in uncertain market conditions. Here are three Swedish dividend stocks yielding up to 5.1% that might pique your interest.
Overview: Solid Försäkringsaktiebolag (OM:SFAB) offers non-life insurance services to both private and business clients across Sweden, Denmark, Norway, Finland, Germany, Switzerland, and other international markets with a market cap of SEK1.61 billion.
Operations: Solid Försäkringsaktiebolag (OM:SFAB) generates its revenue from three main segments: Product (SEK320.51 million), Assistance (SEK351.63 million), and Personal Safety (SEK435.09 million).
Dividend Yield: 5.1%
Solid Försäkringsaktiebolag's dividend payments are covered by earnings (49.1% payout ratio) and free cash flow (73.7% cash payout ratio). Although the company has only recently started paying dividends, its current yield of 5.13% places it in the top 25% of Swedish dividend payers. Recent share repurchases, totaling SEK 10.19 million for 122,188 shares, aim to improve capital structure and shareholder value. Earnings have grown at an annual rate of 28.4% over the past five years.
Overview: AB SKF (publ) designs, manufactures, and sells bearings and units, seals, lubrication systems, condition monitoring, and services worldwide with a market cap of SEK89.45 billion.
Operations: AB SKF (publ) generates revenue from two primary segments: Automotive, which contributes SEK29.44 billion, and Industrial, which accounts for SEK71.08 billion.
Dividend Yield: 3.8%
AB SKF's dividend yield (3.82%) is below the top 25% of Swedish dividend payers. The company's payout ratios are reasonable, with 59.9% of earnings and 53.6% of cash flows covering dividends, indicating sustainability despite a volatile track record over the past decade. Recent strategic moves include exploring a separation of its Automotive business and producing eco-friendly bearings with voestalpine Wire Technology, which may impact future financial stability and growth prospects for dividends.
Overview: Zinzino AB (publ) is a direct sales company that offers dietary supplements and skincare products in Sweden and internationally, with a market cap of SEK 2.84 billion.
Operations: Zinzino AB (publ) generates revenue primarily from its Zinzino (including VMA Life) segment, which contributed SEK 1.83 billion, and the Faun segment, which added SEK 170.31 million.
Dividend Yield: 3.6%
Zinzino's recent financial performance shows strong revenue growth, with a 39% increase in August to SEK 178.7 million and a year-to-date rise of 21% to SEK 1.31 billion. Earnings have also improved, with net income for the second quarter at SEK 47.99 million, up from SEK 36.8 million last year. Despite significant insider selling recently, Zinzino maintains reliable dividend payments covered by both earnings (56.3%) and cash flows (47.4%), though its yield is lower than top-tier Swedish dividend payers at 3.62%.
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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:SFAB OM:SKF B and OM:ZZ B.
