Juicy dividend spring coming

Many people want good news at the beginning of the new year. You didn’t exactly get those from the Finnish economy or the Helsinki Stock Exchange last year.

Danish Bank a recent report on the stock exchange’s dividend pot in the year that started offers surprisingly positive news for domestic investors.

“According to the consensus forecast of analysts who follow Finnish companies, the companies on the Helsinki stock exchange will pay a total of 12.5 billion euros in dividends this spring. The dividend pot falls short of last year’s peak of 13.1 billion, but 12.5 billion euros is still quite a lot. A tough figure”, sums up the Danske Bank portfolio manager Ville Kivipelto.

According to Kivipello, the dividend yield will thus rise to a rare good 4.6 percent. By buying so many shares on the stock exchange, you get dividend euros in your account in proportion to the purchase price.

“The dividend yield is close to the old peaks. The bill is almost completely explained Liquid with the dividend dropping”, says Kivipelto.

Neste ran into difficulties last year when its profitability collapsed. Consequently, it had to cut its dividend, in Danske’s analysis, from the previous year’s 1.2 euros to 54 cents per share.

The pot for all owners will then collapse from more than 900 million euros to 414 million.

“Neste’s share has fallen so much that even if the dividend drops by 55 percent according to the consensus forecast, the dividend yield is still around 4 percent. That’s a pretty good rate of return,” says Kivipelto.

Sampo is rapidly increasing its dividend

Of the companies in Danske’s forecast, 52 will increase their dividend and 38 will increase it by more than five percent. These include, for example, traditional good dividend payers Nordea, Sampo and Kone.

According to the forecast, Sampo will increase its dividend by up to 14 percent.

There are nine new dividend payers or returning dividend payer companies in the forecast. These companies include, for example, Cargotecista split into its own company Kalmar and flew through difficult phases Finnair.

Danske calculates that 58 of the listed companies will not pay a dividend at all this year. These companies include, among others, those suffering from the weakness of the housing market Kojamoand a consumer company Lindex and a software company QT Group.

In addition to Neste, dividend reducers include a steel company SSAB and an energy company Fortumwhich is weighed down by the drop in electricity prices.

The forecast includes the entire dividends of the parallel listed companies Nordea and SSAB, not just the dividends paid to Finland.

The fall in interest rates is encouraging

According to Kivipello, in general, companies whose business is closely linked to Finland make a lower profit than companies whose business is in the rest of the world.

“This can be seen in the spring dividend pot.”

Although last year was weak, according to Kivipello, it is likely that rapidly falling interest rates will be reflected in the companies’ results this year.

“It encourages companies to pay good dividends, even if the result for 2024 has remained somewhat modest. “