The Best Swedish Dividend Stocks
Sweden is by far the biggest stock market in the Nordics, both in terms of market cap and the number of public companies. Nasdaq Stockholm is also home to many excellent companies that pay a dividend.
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Why invest in dividend stocks?
We at Rational Thinking are not dividend investors. We are total return investors, something we believe is the most rational approach to investing.
There are six main reasons why investors are attracted to dividend stocks:
- Most profitable and stable companies pay a dividend.
- Research shows dividend payers have outperformed non-payers.
- A dividend rewards shareholders, and limits empire-building by the management.
- Dividend stocks have less volatile share prices.
- You get “income” you can reinvest.
- “It feels wonderful to receive cash for doing nothing”.
Most of these arguments have been discussed in several articles, and most of them can be debunked (except number two and four). For a complete list of the articles, please look at our landing page:
Below we have compiled a list of 39 Swedish dividend-paying stocks that have a long track record of payments. This is NOT an equivalent of the US Dividend Aristocrats. Most Nordic companies let the dividend vary in relation to earnings, something we appreciate. This makes the allocation process more flexible and rational. Thus, many of the companies below have not raised their dividend each year, some have even reduced the dividend or temporarily postponed it. But we recommend to look at the overall trend and ignore the short-term swings in the payments. After all, any investment should be done with a very long-term view.
We repeat again, as we have done in many other articles: A dividend is not “income”. Hence, it should not be regarded as an income either. The dividend is a capital distribution of retained earnings and thus the future earnings are all that matters.
Even though we believe the companies in this article are among the best stocks on Nasdaq Stockholm, many of them will turn out to be bad investments over the next decade. The list is therefore not a recommendation. This article is a work in progress and stocks will be added later.
Many of the companies are included in our portfolios:
AAK
AAK AB is an international food company. The business segments are Food Ingredients, Chocolate & Confectionery Fats, and Technical Products.
The above chart is incorrect and not updated: The dividend for 2019 was initially postponed due to the pandemic. However, the business is going well and the board proposed a dividend of 2.1 SEK, an increase of 14%, during the third quarter. The ex-dividend date was on the 30th of December 2020. The dividend has been equal to or higher than the previous year since 2006.
ABB
ABB is a well known international company and a result of the merger between Swedish ASEA (Allmänna Svenska Elektriska Aktiebolaget, founded in 1883) and the Swiss BBC (Brown, Boveri & Cie, founded in 1891). The HQ is in Switzerland. The business segments are Electrification, Industrial Automation, Motion, and Robotics & Discrete Automation.
Investor AB is the biggest shareholder with an 11% stake, which we believe is a quality shareholder.
The dividend has been raised every year since 2009, but due to currency fluctuations, the SEK dividend might fluctuate.
Alfa-Laval
The company has long traditions, founded in 1883, but has a relatively short history as a public company. It’s a very industrial company and dependent on the world economy. Alfa Laval provides heat transfer, separation, and fluid handling products and solutions worldwide. The company operates in five segments: Energy, Food & Water, Marine, Greenhouse, and Operations & Other.
Revenue is down 9% for the first nine months of 2020 compared to 2019, and the board wants to preserve cash. The proposed dividend for 2019, 5.5 SEK, was postponed during the pandemic in the spring. The board has not given any indications about the dividend for 2019 and we assume a decision will be made in 2021. Thus, their track-record is broken.
Atlas Copco
Atlas Copco has been listed on Nasdaq Stockholm for 100 years – since 1920. Despite operating in cyclical businesses, it has performed very well over many decades and rewarded the shareholders with market-beating returns. If you want to own 1-3 Scandinavian stocks, Atlas Copco should be on your shortlist. The current business segments are Compressor Technique, Vacuum Technique, Industrial Technique, and Power Technique. In June 2018, it spun off the mining business and listed the new company as Epiroc (EPOKY) in Stockholm. Atlas has low leverage and a conservative balance sheet. It’s built to last.
The dividend has not been lowered (thus not increased every year) since 1983 – a streak of 37 years. Normally Atlas pays the dividend once a year, but because of the pandemic the dividend was split into two payments (the chart includes bonus dividends):
Assa Abloy:
Assa-Abloy is a world-known Swedish firm specializing in locks, doors, gates, ports and any kind of entrance solutions and automation. It’s a super brand in their business. Even though it has existed for a long time, Assa AB was spun-off from Securitas as late as 1994. Later it merged with the Finnish Abloy Oy. Acquisitions are the main driver for growth, but we believe it has a future tailwind from urbanization, increased security, and regulation. The goal is 10% annual growth over a business cycle, which they have managed over the last decade. The management has performed over 300 acquisitions since 1994. Acquisitions are difficult due to different cultures, but Assa Abloy seems to manage this very well.
Worth noting is that the two biggest shareholders are the investment company Latour and Melker Schörling AB. These are quality shareholders who are in it for the long-term.
Since its listing in 1994, the dividend has never been lowered. It was close in 2020, but the dividend paid in the second half made sure the track-record is intact.
AstraZeneca
We assume Astra needs very little explanation, as this drug company has been in the news during the race for making a vaccine against the Covid-19. The company is a result of the merger between Swedish Astra and the British Zeneca and is now headquartered in the UK.
The dividend has been pretty stable despite some changes from year to year due to currency fluctuations:
Atrium Ljungberg:
This is a real state company described in our report on the best Swedish real estate companies.
Since the merger between Ljungberg and Atrium in 2006, the dividend has been equal or higher than the previous year. But both companies paid a dividend prior to this, so the streak has in reality been longer than 14 years.
Axfood:
Axfood operates in a boring but stable business: groceries. This is a pretty “recession-proof” business where a lot must go wrong to be disrupted. Like many other Swedish companies, it’s family-controlled.
They have paid a dividend since at least the year 2000, but the dividend was lowered in 2009. Several extra dividends have been paid along the way.
Beijer Alma:
The Beijer Alma Group owns and develops industrial companies that have the potential to grow profitability in international markets. Currently, they own three subsidiaries.
Up until the Covid-19 in 2020, the dividend was never lowered since 2003. The dividend for 2019 was initially postponed but later reduced.
Beijer Ref:
Beijer Ref is the world’s largest global refrigerator wholesaler. The products supplied cover the fields of commercial refrigeration, industrial refrigeration, air conditioning, and heating. Beijer Ref and Alma was up until the year 2000 Beijer Electronics but was split in two.
The dividend was kept the same or higher than the previous year from 2001 until 2019. The dividend was lowered for 2019.
BTS group
BTS is a strategy implementation consulting firm with a focus on the global market. The company was founded in 1986.
Since the listing in 2001, the dividend has been equal to or higher than the year before.
Castellum
Castellum is perhaps the most diversified real estate company in Sweden both in terms of geography and related industries. Recently they made an offer to acquire the Norwegian Entra, a company that has 60% of public/government tenants. Castellum was covered in our report on the best Swedish real estate companies.
Castellum has increased the dividend each year since 1997, and is among the few who pay the dividend semi-annually.
Essity:
We have covered Essity in a separate article. Essity is also part of our Scandinavian dividend portfolio.
The dividend history is short because Essity was spun-off from SCA. However, as a consumer staple, we believe Essity will pay a rising dividend over time.
Fenix Outdoor:
Fenix is a retailer in the outdoor market with 81 shops in Sweden, Finland, Germany and Denmark. The most famous brand is the Fjällräven.
The CEO, Martin Nordin, controls 52.9% of the company.
The IPO was back in 1983. The dividend was initiated in 1993 and never lowered until the Covid-19 debacle in 2020. Because of the Covid-19, the board has proposed no dividend for 2019:
Fast Partner
This is a real state company described in our report on the best Swedish real estate companies.
The dividend has been equal to or higher than the previous year since 2002.
Hennes&Muaritz (H&M):
H&M needs little presentation as a world-known retailer owned by the Persson family who controls 75% of the shares. The stock was listed in 1974.
The dividend has been lowered once since the IPO, but over the last ten years, the dividend has hardly increased until Covid-19 came. The 2020 AGM approved the board’s proposal that no dividend be paid and the amount is being carried forward.
Hexagon:
Hexagon provides data solutions: sensors, software and autonomous technologies. The target is most industries, but mainly industry and real estate (geospatial). The growth has been spectacular: From 500 million EUR in sales in 2000 to over 4 bn today, an eightfold increase.
The famous investor Melker Schörling is the biggest owner with 23% of the equity and 44.4% of the voting rights, which we believe is a quality shareholder.
The dividend has increased every year since 2009.
Hufvudstaden
This is a real state company described in our report on the best Swedish real estate companies. The company is controlled by Lundbergföretagen.
The dividend has been increased every year since 2001. Worth noting is the low leverage of the company (around 20% to LTV) which should make it pretty antifragile. We believe Hufvudstaden has the safest dividend among the real estate stocks.
Industrivärden
We have recently published an article about Industrvärden and other Swedish investment companies. As we can see, the ordinary dividend has been lowered three times over the last twenty years, but the overall trend is rising:
Intrum:
Intrum is mainly a debt collection company. The business is good, and the dividend has been growing nicely since 2005: every year it has been equal to or higher than the year before.
Investor AB
We covered Investor AB in a previous article:
Investor aims to increase the dividend every year, but they have lowered the dividend twice since 1997. However, the annual growth has been a respectable 8%:
Kinnevik:
Kinnevik is an investment company that invests mainly in media and digital businesses. We covered the stock in our report on Swedish investment companies.
Lagercrantz:
Lagercrants was listed in 2001. The company is a B2B wholesaler in electronics and communications. The dividend was initiated in 2006 and has been kept equal or higher every year since then.
Latour:
Latour is controlled by the Douglas family and we covered the company in our report on Swedish investment companies. The performance of the share price and NAV have both been spectacular, albeit the dividend has been lowered twice since the year 2000:
Loomis:
Loomis was a part of Securitas but was spun off in 2008 and listed as a separate company. The business is cash management in the US and 11 EU countries.
The dividend was increased every year since the IPO, but for 2019 the dividend was cut in half (5.5 SEK – not included in the graph).
Lundbergföretagen:
Lundbergföretagen is controlled by the Lundberg family and has a big exposure to real estate. We covered the company in our report on Swedish investment companies.
The stock has outperformed the Swedish Total Return Index (SIX) by a wide margin since the year 2000.
The dividend was lowered during the GFC in 2008/09.
Nibe:
Nibe makes heat pumps and has been listed since 1997. The dividend has either been equal to or higher than the previous year ever since.
SCA A
SCA “is driven by the force of the forest”. Their slogan sums up pretty well what SCA is a all about: forest and management of its resources. The core of SCA’s business is the 2.6 million hectares of land it owns in northern Sweden. Around this unique resource, they have built a well-developed value chain based on renewable raw materials.
SCA has a long-term quality shareholder in Industrivärden which controls 29% of the votes.
The listing took place in 1950 and the dividend has been reduced twice: during the GFC in 2008/09 and the Covid-19 debacle in the spring of 2020. The dividend is postponed for 2019.
Skanska:
Skanska is a project development and construction group, thus pretty liable to the business cycles. However, they managed to keep the dividend during the GFC in 2008/09, but it was lowered both in 2018 and 2019. This means their streak of 15 years of not lowering their dividend came to an end in 2018 (since 2003).
Softronic:
Softronic’s 450 consultants provide digital solutions to its clients. The dividend was initiated in 2007 and never lowered until 2020 when the Covid-19 made a dent into their performance:
Svenska Handelsbanken:
We believe Handelsbanken is the best Swedish bank – by far. We have covered the stock in a separate article:
Since the Swedish banking crisis in 1992, the dividend has been lowered once: 2009. However, that was until Covid-19 came about. The dividend for 2019 was later postponed and will not be paid, even though we believe they could afford to. But Handelsbanken is a conservative bank and this has served the shareholders well over the long run. The dividend will resume later.
Sweco:
The company is among Europe’s leading companies within architecture and engineering, a typical asset-light business model. Although based in Sweden, the total sales of almost 2 bn EUR come from over 70 countries.
Sweco was listed in 1998 and has never lowered its dividend. In addition, there have been numerous bonus dividends. During the pandemic in the spring, the board decided to only pay half of the proposed dividend and pay the other half later in the year if things turned around. It did, and the rest was paid as planned.
Swedish Match:
This Swedish sin stock has never lowered the dividend since it went public in 1996. Please check out our analysis of the company.
Just like Castellum, Swedish Match has increased the dividend every year since 1997 in addition to many extra dividends. The graph below includes bonus dividends.
Traction AB:
Traction is an investment company which we have covered in another separate article about Swedish investment companies. Its dividend has been rather erratic, but steadily rising over the years:
Tele 2:
Tele2 is a telecom company controlled by Kinnevik which has 42% of the votes. Telecom is an industry where it’s hard to gain any competitive advantages and is strongly regulated in the EU. The share price of most telecom companies has suffered since the dotcom bubble burst back in the year 2000. The share price of Tele2 has languished as well.
Just as with other telecom companies, the dividend is high. The table below summarizes both cash dividends and other distributions:
Telia:
Telia is a Nordic telecom behemoth but shareholders have suffered from a share price going nowhere for two decades. Despite this, Telia has kept the dividend steady or higher every year from 2002 until 2016 and 2019:
Vitec Software:
Vitec provides vertical software solutions for a wide range of industries (vertical software is software for a specific industry – horizontal is for a wide range of industries). Most of the income is recurring, thus providing a “safe” income and high switching costs for the customer. The founder, Lars Stenlund, controls 26% of the voting rights.
Vitec’s dividend has been increased every year since 2003.
Wallenstam
This is a real state company described in our report on the best Swedish real estate companies.
Wallenstum cut the dividend during the Swedish banking crisis in the early 90s, and yet again in 2020, but was kept equal to or higher than the previous year in the period between those two years.
Wihlborgs
This is a real state company described in our report on the best Swedish real estate companies.
Fabege and Wihlborgs “separated” back in 2005 and Wihlborgs has increased the dividend every year since.
AFRY (Åf Pöyry):
The company is a result of the merger of Åf (Swedish) and Pöyry (Finnish), both engineering and consulting companies. It was rebranded to AFRY in 2019. The listing goes back to 1986 and currently the main shareholders are institutions.
The dividend was increased every year from 2002 until 2019 when it was postponed to conserve cash.
Disclosure: We are not financial advisors. Please do your own due diligence and investment research or consult a financial professional. All articles are our opinion – they are not suggestions to buy or sell any securities. We own many of the companies mentioned in the article.
