Stockholm Stock Exchange’s large-cap companies are set to distribute over 400 billion Swedish kronor to their shareholders this spring, as forecasted by Handelsbanken’s investment strategist, Peter Engstedt.
Engstedt believes that stocks with high dividend yields have historically provided higher risk-adjusted returns than the overall market. He argues that high dividends signal strong future prospects for a company, while a high dividend yield suggests undervaluation. Additionally, a high and stable dividend yield can offer some protection against market downturns, as stated in the latest edition of the customer magazine Fokus Placeringar.
He has compiled a list of 10 high dividend-paying stocks that he hopes will continue to be “stable dividend payers in the future.” To make it onto his and the major bank’s list, a company must have a high dividend yield, be expected to provide a stable and increasing dividend, and have a strong dividend history.
The ten stocks on his list include Axfood, Biogaia, Elekta, Ericsson, Essity, SEB, Skanska, Swedbank, Tele2, and Volvo, with an average dividend yield of 5%.
Engstedt briefly discusses some of the selected stocks, such as the construction giant Skanska. He notes, “Skanska has a strong balance sheet and a large number of unsold properties and ongoing projects that will be realized in the coming years. This should generate strong cash flows and high dividends in the future.”
The emphasis on high dividend yields reflects Engstedt’s confidence in these companies’ ability to deliver consistent returns to their shareholders. As investors seek stable income streams and potential capital appreciation, these dividend-paying stocks may offer a compelling opportunity in the current market environment.