Three Swedish dividend stocks offering yields of 4% to 5.9%

While global markets are receiving mixed signals with varying performance across major indices, the Swedish market continues to offer attractive opportunities for dividend-seeking investors. In this context, selecting stocks that not only offer attractive returns but also demonstrate stability and growth potential becomes crucial for those looking to enhance their investment portfolio.

Top 10 dividend stocks in Sweden

Click here to see the full list of 24 stocks in our pick of the highest dividend stocks.

Below, we highlight a few of our favorites from our exclusive screener.

Simply Wall St Dividend Rating: ★★★★☆☆

Preview: Bahnhof AB operates in the Internet and telecommunications sector, primarily in Sweden and throughout Europe, with a market capitalization of approximately SEK 5.32 billion.

Operations: Bahnhof AB generates revenue through its retail market and corporate market segments, earning SEK 1.30 billion and SEK 606.24 million, respectively.

Dividend yield: 4%

Bahnhof AB has demonstrated a consistent dividend history over the past decade, with stable and growing distributions. However, despite recent earnings and sales growth reported on May 7, 2024, the sustainability of dividends is questionable. Dividends are not well covered by earnings, with a high payout ratio of 97.5%, indicating potential pressure on future payouts. Additionally, although Bahnhof’s stock trades below our estimated fair value of 27.2%, its dividend yield of 4.04% remains slightly below the top quartile of the Swedish market.

Simply Wall St Dividend Rating: ★★★★☆☆

Preview: BioGaia AB, a Sweden-based healthcare company, specializes in the development and distribution of probiotic products globally, with a market capitalization of approximately SEK 12.81 billion.

Operations: BioGaia AB generates revenue mainly through two segments: Pediatrics at SEK 999.84 million and Adult Health at SEK 293.44 million.

Dividend yield: 5.4%

BioGaia’s dividend yield of 5.44% ranks well in Sweden, beating the market average of 4.18%, reflecting a decade of distribution growth. However, its dividends face coverage issues with a high cash payout ratio of 215.5%, suggesting potential free cash flow stress despite a reasonable earnings-based payout ratio of 51. 7%. Recent financial data shows modest growth, with first quarter net profit rising to SEK 121.85 million versus SEK 115.95 million year-on-year, but volatility and reliability issues persist due to inconsistent dividend patterns over the last ten years.

The story continues

Simply Wall St Dividend Rating: ★★★★☆☆

Preview: G5 Entertainment AB, based in Sweden, specializes in the development and publishing of free games for smartphones, tablets and personal computers with a market capitalization of SEK 1.06 billion.

Operations: G5 Entertainment AB generates its revenue mainly from the development and sale of casual games, totaling SEK 1,271.96 million.

Dividend yield: 6%

G5 Entertainment, with a dividend yield of 5.96%, is above the Swedish market average. Despite a recent decline in first quarter sales to SEK 297.41 million and net profit to SEK 37.48 million, the company maintains a healthy payout ratio of 54.4%, ensuring that dividends are well covered by profits and cash flow (cash distribution rate at 36.1%). However, its dividend history is relatively short (seven years), raising questions about long-term sustainability amid forecasts of modest earnings growth, at 4.1% per year.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to constitute financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your objectives or your financial situation. Our goal is to provide you with targeted, long-term analysis based on fundamental data. Note that our analysis may not take into account 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:BAHN B OM:BIOG B and OM:G5EN.

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