No. of Recommendations: 5
and a dividend yield of 8%...up 55% over the past 12 mo?!Remember that for most companies outside the US, dividends are generally quite variable based on business conditions, and a dividend cut is not considered a sign of anything in particular. The disproportionate meaning inferred from steadily increasing dividends is a peculiarly North American thing.
It has been a good year, so the dividend is high. The current period dividend is 13 SEK, made up of 6.50 in regular dividends and 6.50 in special dividend, 10.3% yield on the current price. But there is no certainty about what the next one will be. Here is the history
https://www.handelsbanken.com/en/investor-relation...The range is quite broad, including no dividend at all in fiscal 2019 / calendar 2020. (the Swedish government requested that banks not pay one because of Covid). Six year average is 6.65 or 7.74% on the current price of SEK 126.15. Ignoring the dry year, four year average is SEK 8.60 or 6.82% yield on the current price.
I don't own any. My main hesitation is that buying bank stocks is, in general, a bad move. Unless you are a real expert, which I'm not.
A recent comment of mine to that effect
https://www.shrewdm.com/MB?pid=942876367That being said, if you're going to buy into a bank anywhere, it really does seem that this one would not be among the riskier choices.
Preposterous capital ratios compared to most banks, and still managing a very solid double digit ROE. In the 13-14% range in the last couple of years after a gently rising trend post Covid, and usually in the 9.5-14% range over the last decade. A high ROE is not so hard when you're overleveraged, but a conservative balance sheet would normally be accompanied by lower returns on the capital in hand.
Jim
