Sampo Oyj fell to its lowest price in almost a month in Helsinki after Danske Bank A/S said the owner of the Nordic region’s largest property and casualty insurer isn’t paying enough dividends to justify its stock price.
Sampo fell as much as 1.4 percent to 31.05 euros, the lowest price since May 8. The stock declined 0.9 percent at 1:16 p.m. in the Finnish capital with trading volume at 16 percent of the three-month average.
Sampo, which owns Solna, Sweden-based insurer If, has traded above its average 12-month price estimate all year, according to data compiled by Bloomberg. The Finnish company failed to provide new insights to merit the premium at its capital markets day in London last week, Danske Bank said in a note to clients today.
The meeting’s “key message was that Sampo is a dividend stock - the challenge is that it does not deliver an attractive yield versus its peers,” Danske said. “The event didn’t provide us with any news and we continue to view Sampo as overvalued.” The bank reiterated its recommendation to sell, which it has had for more than two years.
The Helsinki-based company, which has increased dividend payments four years straight, has added 28 percent in market value this year compared with a 7.1 percent gain in the Stoxx Europe 600 Index. The company will increase dividend payments next year to 1.4 euros a share from 1.35 euros a share this year and then keep investor returns unchanged in 2015 and 2016, according to Bloomberg dividend projections.