Analyst: Record cash position could give Ericsson shareholders extra dividend - Di
After a strong year last year, where the share rose over 40 percent, the company now shows a strong balance sheet with a free cash flow of SEK 24 billion for the first nine months of the year.
With Q4 being the company's strongest period, as well as an upcoming billion-dollar sale of its subsidiary Iconectiv, the cash position is expected to swell further, says DNB analyst Joachim Gunell. He emphasizes the possibility for the telecom giant to distribute an additional SEK 2-3 per share to shareholders. This in the form of an extra dividend or by launching a buyback program.
According to Handelsbanken's Daniel Djurberg, the dividend for 2024 could be raised to SEK 3.10 per share, with an additional SEK 5 as an extra dividend, which would mean a total dividend yield of close to 9 percent.
Factset's consensus figures, which the business magazine has taken note of, point to a dividend of SEK 2.79. Last year Ericsson paid out SEK 2.70 per share.
Historically, Ericsson has dealt with setbacks such as bribery and failed acquisitions, but now the company has the chance to strengthen its image as shareholder-friendly, Daniel Djurberg emphasizes.
A dividend announcement is expected in connection with the financial statements on January 24.
Both Joachim Gunell and Daniel Djurberg have a buy recommendation for Ericsson.
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