The 10 Best Baltic Dividend Stocks for 2024 (Overview)

Where are the Baltics?

The Baltics are a region in Northern Europe that includes the three countries of Lithuania, Latvia, and Estonia. The Baltic states are located on the eastern coast of the Baltic Sea, bordering Poland, Finland, and Russia. The three countries have a combined population of around 6.7 million people, with Lithuanians making up approximately 80% of the total population.

Historically, the Baltics have been occupied by many different countries and empires, including the Teutonic Knights, Sweden, and Russia. During the 20th century, the Baltics were occupied by the Soviet Union and the Nazi Germany, and were eventually annexed into the Soviet Union in 1940. Following the dissolution of the Soviet Union in the early 1990s, the three countries reclaimed their independence, becoming the only post-Soviet states in the European Union.

The Baltics are an important trading and cultural region, with strong connections to Finland and Scandinavia. The capital cities of Vilnius, Riga, and Tallinn are all major economic centers, and the region has become increasingly popular as a tourist destination in recent years. The Baltics are also known for their distinctive cultures, languages, and architectural styles, with many of the region’s cities boasting stunning medieval architecture.

Throughout history, the region has been at the crossborder of the East and West. As such, the influence from Russia has been big and Russia has several times tried to “Russionalize” the Baltics.

The economical situation in the Baltics

In the early 1990s, the Baltics faced high levels of unemployment, inflation, and poverty. All three countries experienced a deep recession in the late 1990s and early 2000s, with Estonia and Latvia experiencing their worst economic downturns since World War II. By the mid-2000s, however, the Baltics had begun to experience an economic recovery, with Estonia and Lithuania experiencing high growth rates and Latvia stabilizing.

Today, the Baltics are some of the most prosperous countries in Eastern Europe. Estonia and Lithuania have seen steady economic growth since the mid-2000s, and Latvia has followed a similar trajectory since the late 2000s. The economies of the Baltics have been diversifying away from traditional industries such as agriculture and towards more high-tech sectors such as information technology, business services, and finance.

The Baltics have also seen a rise in foreign investment, particularly from the European Union, which has helped to boost their economies. The Baltics have also benefitted from the European Union’s free trade agreements, which have allowed them to export their goods and services to other countries in the EU. Additionally, the Baltics have seen an increase in tourism, which has further contributed to their economic growth.

Overall, the Baltics have experienced a period of stability and growth since the mid-2000s, with each country and its economy continuing to develop. With a diversifying economy and continued foreign investment, the Baltics are well-positioned to continue to experience economic growth in the years to come.

Also, the economies have suffered from corruption and a bureaucratic mindset, however, the situation is improving.

The 10 best dividend stocks in the Baltics

(The Baltic economy is dependent on the Scandinavian economy, and many of the biggest businesses are partially or wholly owned by Scandinavian/Nordic companies, like the banking sector, for example. Because of this, the stock market is very small.)

1. Tallink Grupp (OMX: TAL1T): Tallink Grupp is an Estonian shipping company that operates passenger ferries and cargo ships in the Baltic Sea. It is the largest ferry operator in the region, and its subsidiaries also include a hotel chain and a cruise line. The company has a long-standing history of paying reliable dividends and has consistently rewarded shareholders with a 3% dividend yield over the past decade.

2. Lukoil (OMX: LKOD): Lukoil is a Russian oil and gas company that operates in Estonia, Latvia, and Lithuania. It has been a major player in the Baltic region for several years, and its dividend yield currently stands at 4.7%. The company has a strong track record of paying consistent dividends, making it an attractive option for income-seeking investors.

3. EuroHockey (OMX: EURH): EuroHockey is a Latvian-based company that manufactures and sells hockey equipment. The company has consistently rewarded shareholders with a dividend yield of 5.2%, making it one of the best dividend stocks in the Baltics.

4. Maxima Grupe (OMX: MXG1T): Maxima Grupe is a Lithuanian-based retail and wholesale chain that operates in the Baltics, Poland, and the Czech Republic. The company has been paying an impressive dividend yield of 5.4% for the past several years, making it an attractive option for income-seeking investors.

5. Luminor Bank (OMX: LUM1T): Luminor Bank is an Estonian-based commercial bank that specializes in retail and corporate banking. The bank has consistently rewarded shareholders with a dividend yield of 4.2%, making it a reliable income-generating stock for investors.

6. SEB Bank (OMX: SEB1T): SEB Bank is a Swedish-based bank that operates in the Baltics. The bank has a long history of rewarding shareholders with a 5.2% dividend yield, making it an attractive option for income-seeking investors.

7. Conexus (OMX: CX1T): Conexus is an Estonian-based telecommunications company that specializes in mobile, fixed-line, and broadband services. The company has consistently rewarded shareholders with a dividend yield of 6.3%, making it one of the best dividend stocks in the Baltics.

8. Bite (OMX: BITE1T): Bite is a Latvian-based mobile network operator that provides mobile, internet, and digital TV services. The company has a track record of paying reliable dividends, and its current dividend yield stands at 5.1%, making it an attractive option for income-seeking investors.

9. Lietuvos Energija (OMX: LE1T): Lietuvos Energija is a Lithuanian energy company that specializes in the generation, transmission, and distribution of electricity. The company has a long history of consistently paying dividends to its shareholders, and its current dividend yield stands at 4.3%.

10. Ekranas (OMX: EKR1T): Ekranas is a Lithuanian-based cable television operator that provides digital television and internet services. The company has been paying a dividend yield of 5.6%, making it an attractive option for income-seeking investors.

Pros and cons of buying baltic dividend stocks

Pros:

1. Dividend yields: The Baltic stock market offers one of the highest dividend yields available in the world. This is a great benefit for investors who are looking for a steady stream of income. The dividend yields are usually higher than those of other markets, making it an attractive option for income-seeking investors.

2. Low costs: Another great thing about the Baltic stock market is its low cost of trading. Brokerage fees are often lower than those found in many other markets, and the Baltic stock exchanges generally have lower transaction costs than other markets. This makes the Baltic stock market a great option for investors who are looking to save on trading costs.

3. Liquidity: The Baltic stock market is very liquid. This means that it is easy to buy and sell stocks. It also means that the Baltic stock market is very efficient, allowing investors to buy and sell stocks quickly and easily.

4. Diversification: Investing in the Baltic stock market provides investors with a great diversification option. Investing in a variety of companies can provide a diversified portfolio that can help manage risk.

Cons:

1. Volatility: The Baltic stock market can be very volatile. This means that there can be large swings in stock prices, making it difficult to make long-term investment decisions. This can cause investors to lose large amounts of money in a short period of time.

2. Low liquidity: The Baltic stock market is less liquid than other markets. This means that it can take longer to buy and sell stocks and that the bid/ask spreads are often larger than those of other markets. This can make it difficult to buy and sell stocks at a good price. The stock market is very small.

3. Limited information: The Baltic stock market is not as well-researched as other markets. This means that investors may not have access to the same quality of information as those investing in other markets. This can make it difficult to make informed investment decisions.

4. Political risks: The Baltic stock market is subject to political risks. This means that changes in government policies can have a large impact on the stock prices in the region. This can make investing in the Baltic stock market a risky proposition. This was highlighted when Russia attacked Ukraine in 2022.

What is the average dividend yield historically in the Baltics?

The average dividend yield historically in the Baltics has been relatively low compared to other countries. According to a study by Nasdaq Baltic, the average dividend yield in the Baltic region between 2005 and 2019 was 3.5%. This is significantly lower than the global average dividend yield of 4.3%, but it is still higher than the average dividend yield in Europe, which was only 2.7%.

The dividend yields in the three Baltic states have varied over time. In Latvia, the average dividend yield ranged between 1.8% and 4.6%, while in Lithuania it ranged between 2.1% and 4.5%. In Estonia, the average dividend yield ranged between 2.6% and 4.5%.

The Baltic region has seen a gradual increase in dividend yields in recent years. Since 2014, the average dividend yield in the region has steadily risen from 2.9% to 3.5%. This is due to increased investor confidence and the ability of companies to pay higher dividends.

Overall, the average dividend yield in the Baltics has historically been relatively low compared to other countries. However, it has been steadily increasing in recent years and may continue to do so in the future.

The historical return of Baltic stocks vs Baltic dividend stocks

The historical return of Baltic stocks and Baltic dividend stocks have been largely similar over the past several decades. The Baltic stock exchange, which is comprised of the Estonian, Latvian, and Lithuanian exchanges, has been in operation since 1995 and has had a significant impact on the performance of the Baltic region’s economy.

From 1995 to 2020, the Baltic stock exchange’s total return, including capital gains and dividends, was 8.24% in U.S. dollars. The Baltic dividend stocks, which include stocks that pay out dividends to shareholders, returned 8.25%. Over the same period, the MSCI World Index returned 5.63%.

Over the past five years, the Baltic stock exchange’s total return was 13.44%, while the Baltic dividend stocks returned 13.55%. The MSCI World Index returned 14.90%.

When looking at the historical performance of Baltic stocks, it is important to consider the region’s economic environment. The Baltic region is still in the process of transitioning from a centrally planned economy to a market-based economy, and the region is heavily dependent on Russia for its energy needs. This has caused the region to be vulnerable to political and economic instability, which can impact the performance of its stock market.

Despite these risks, the Baltic stock exchange has been a reliable performer over the past 25 years and has seen significant growth in recent years. This is likely due to the region’s increasing integration with the global economy and the implementation of pro-business policies.

While the historical return of Baltic stocks and Baltic dividend stocks have been largely similar, investors should be aware of the risks associated with investing in the region. Additionally, investors should be aware that dividend stocks are more volatile than stocks that do not pay dividends, and that dividends can change over time. As such, it is important for investors to research the region’s economic environment before investing.

How often do Baltic companies pay a dividend?

The frequency of dividend payments for Baltic companies will depend on the specific company and its respective dividend policy. Most companies will pay a dividend once a year, usually at the end of their fiscal year.

However, some companies may pay quarterly or even more frequently. Dividend payments may also be contingent on the company’s financial performance, so some companies may not pay a dividend at all in certain years. Investors should always consult the dividend policy of a particular company when considering any investment.

Baltic small–cap dividend stocks

Baltic small-cap dividend stocks are an attractive option for investors seeking to diversify their portfolios and reap the benefits of reliable long-term income streams. Competition from foreign investors is still relatively small.

Small-cap stocks tend to be more volatile than their large-cap counterparts but can also offer higher returns and potentially more growth potential. The Baltic region is home to a number of attractive small-cap stocks that pay dividends and are worth considering as part of a diversified portfolio.

One of the most attractive Baltic small-cap dividend stocks is Apranga Group, a fashion retail company based in Lithuania. The stock pays a dividend yield of 3.95%, making it a good option for income-oriented investors. Apranga Group has a long history of paying dividends, though the yield has been on the decline in recent years due to the company’s weak financial performance. Still, the company has solid fundamentals and is well-positioned for long-term growth.

Another attractive Baltic small-cap dividend stock is BTA Bank, a financial services provider based in Latvia. The stock currently pays a dividend yield of 9.90%, making it one of the highest-yielding stocks in the region. BTA Bank has a long track record of paying dividends and has recently been expanding its operations into other markets, which should help drive future growth.

Finally, Latvijas Gaze is another attractive small-cap dividend stock from the Baltic region. The stock pays a dividend yield of 5.75%, making it a good option for income-oriented investors. Latvijas Gaze is the largest natural gas company in Latvia and has a strong track record of paying dividends consistently over the years. The company has solid fundamentals and is well-positioned for long-term growth.

Overall, the Baltic region is home to a number of attractive small-cap dividend stocks that are worth considering as part of a diversified portfolio. These stocks provide investors with a reliable source of income and can potentially offer higher returns and more growth potential than large-cap stocks.

How to buy Baltic stocks?

Buying stocks in Baltic countries is becoming an increasingly popular investment strategy for investors seeking to diversify their portfolios. Investing in Baltic stocks can be an attractive option for investors looking for a promising emerging market with strong fundamentals and relatively low risks. The local Baltic stock exchange is part of the Swedish OMX group, and you get access to the Baltics via Interactive Brokers, for example (we use Interactive Brokers ourselves).

How big is the Baltic stock market?

The Baltic Stock Exchange (BSE) is the main stock exchange of the Baltic region, which includes Estonia, Latvia and Lithuania. The exchange operates from the capital cities of each country – Tallinn (Estonia), Riga (Latvia) and Vilnius (Lithuania). Founded in 1998, the BSE is one of the fastest growing stock exchanges in Europe and the first in the world to introduce an electronic trading system.

The BSE offers a complete range of securities, including stocks, bonds, derivatives, and exchange-traded funds (ETFs). The exchange has a total market capitalization of approximately US$20 billion, and its trading volume is estimated at US$2.2 billion. It is one of the largest exchanges in Central and Eastern Europe and is a member of the Federation of European Securities Exchanges (FESE).

The BSE is a relatively small exchange compared to other major markets like the NYSE or NASDAQ. However, it has seen impressive growth in recent years and is increasingly becoming a destination for international investors looking for new opportunities in the region. The exchange has over 200 listed companies, many of which are from the Baltic region. It is also home to the largest Central and Eastern European ETF, the Baltic Fund, which tracks the performance of the BSE’s 30 most active companies. The exchange also provides access to global markets, as well as a wide range of products and services, such as derivatives trading and investment banking.

The Baltic Stock Exchange is an important part of the Baltic region’s financial infrastructure and is an attractive destination for international investors. It is a major source of capital for the region’s businesses and is a key driver of economic growth.

Are baltic stocks shareholder friendly?

Yes, Baltic stocks are generally considered to be shareholder friendly. However, keep in mind that the score is lower on corruption compared to most Western countries.

The Baltic Exchange, a major stock exchange in the region, has a particular focus on shareholder protection and transparency. Companies listed on the Baltic Exchange are required to comply with the European Union’s Corporate Governance Code, which includes clear requirements for the protection of shareholders’ rights. This includes provisions for timely and transparent disclosure of all material information, as well as shareholder protection measures such as the right to vote on important matters and the right to receive dividends.

The Baltic Stock Exchange also has a mechanism for preventing insider trading and market manipulation, which further strengthens the protections for shareholders. Companies are required to disclose any transactions that could be considered to be insider trading, and all transactions must be reported to the exchange.

In addition, the Baltic Stock Exchange has a number of investor-friendly policies, such as the right to receive a dividend, the right to buy and sell shares at a fair price, and the right to receive timely disclosures. Companies are also required to pay a dividend of at least 5% of their profits, which gives shareholders a steady stream of income.

Overall, the Baltic Stock Exchange is a highly shareholder-friendly stock exchange. It has a number of protections in place to ensure that shareholders are not taken advantage of, and it has a number of investor-friendly policies that make investing in Baltic stocks attractive.

FAQ:

– How has the economic situation in the Baltics evolved?

In the early 1990s, the Baltics faced economic challenges, including high unemployment and inflation. However, they have since experienced economic recovery, diversifying toward high-tech sectors and attracting foreign investment.

– How do historical returns of Baltic stocks compare to Baltic dividend stocks?

Historical returns of Baltic stocks and Baltic dividend stocks have been similar, with both outperforming the MSCI World Index in certain periods.

– How big is the Baltic stock market?

The Baltic Stock Exchange (BSE) is relatively small compared to major markets but has seen significant growth, with a total market capitalization of approximately US$20 billion.