Tallink Rises Record 10th Day on Dividend Talk: Tallinn Mover

AS Tallink Grupp (TAL1T) rose for a 10th day, the longest winning streak on record, amid expectations the largest Baltic ferry company will start paying a dividend.

The stock has risen 9.7 percent since the company reported a 22 percent increase in third-quarter net income to 49.6 million euros ($63.9 million) on Nov. 15. It rose 1.6 percent today in Tallinn to 0.767 euro, a 19-month high, valuing the company at 516.8 million euros.

Tallink, which mainly ships passengers and goods between Estonia, Finland and Sweden, said on Nov. 15 it expects a “dividend policy in the near future.” The Estonian company hasn’t paid a dividend since it began trading in December 2005.

“The fact that management openly mentioned the word ‘dividend’ in their report is probably what’s driving the stock’s advance,” Pavel Lupandin, an analyst at SEB Enskilda in Tallinn, said by phone today. “This is one of our top picks at the moment, with still some more potential to rise.”

SEB Enskilda has a buy recommendation for Tallink, with a target price of 0.87 euro, Lupandin said.

Fund Holdings

Citigroup Venture Capital International, which held 7.31 percent of Tallink as of Nov. 19, said on its website that Tallink’s acquisition in July 2006 of Silja Line helped the company become “one of Europe’s largest and most profitable ferry operators.”

East Capital Asset Management said at the end of June that it had increased total holdings of Tallink shares in its Baltic (EACBALT) and East Europe (EACOSTE) funds by more than a quarter to 1.87 percent.

“We expect the company to start paying dividends from next year and estimate the dividend for 2012 earnings to be 3 cents per share, implying a 4 percent dividend yield,” Marek Randma, head of Baltic equity research at Swedbank, said in a note on Nov. 16. Swedbank raised its price estimate for the stock to 1 euro from 95 cents and confirmed its strong buy recommendation.

Volume today of 150,918 shares was almost twice the daily average during the last three months. Tallink’s gain helped push the OMX Tallinn share index up 0.25 percent to an 18-month high of 693.28, according to data compiled by Bloomberg.

To contact the reporter on this story: Bryan Bradley in Vilnius at bbradley13@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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