Photographer: Andrey Rudakov/Bloomberg

These Swedish Stocks Will Pay You the Best Dividends in 2017

  • Ericsson, Nordea set to be among top-paying Swedish stocks
  • Banks, telecoms shares will probably deliver best dividends

Sweden may have negative interest rates, but its biggest firms are about to deliver some hefty payouts to their shareholders.

Of the 29 names listed on Sweden’s index of its most-traded stocks, phone companies Tele2 AB and Ericsson AB offer the highest projected dividend yields over the next 12 months, according to Bloomberg BDVD forecasts. Then it’s three of Sweden’s biggest banks: Nordea Bank AB, Swedbank AB and SEB AB. Based on the latest closing prices, the average dividend yield forecast for Sweden’s benchmark index is higher than for the Stoxx 600 Index. It also beats Germany’s DAX and is on par with the U.K.’s FTSE 100 Index.

Shareholders will learn how much they’ll get in dividends when Sweden’s biggest companies start announcing their fourth-quarter results at the end of this month. Martin Guri, chief analyst at Nordea in Stockholm, says companies in low-growth industries will be the most generous with investors.

For telecoms operators, real estate firms and banks, “there’s not really anything to acquire,” Guri said. That means “the money will be distributed to shareholders.”

Of the 26 companies on Stockholm’s main index that pay a dividend, 16 are seen raising their ordinary payout for 2016 while nine are forecast to leave it unchanged. Only one (Telia AB) is expected to cut its payment. The dividends are paid out after annual general meetings, which are typically held in the spring.

A high projected dividend yield doesn’t necessarily mean a company is a top pick among analysts. Based solely on the expected share-price development in the coming 12 months, investors in Swedish stocks should focus on the Wallenberg family’s holding company Investor AB and the Stenbeck family’s Kinnevik AB, as well as tissue-maker Svenska Cellulosa AB.

Those three companies have the highest proportion of buy ratings in Sweden’s benchmark index. Of the analysts covering Investor AB, 80 percent recommend that clients buy the stock while 64 percent have buy ratings on Kinnevik. For Svenska Cellulosa, or SCA, 72 percent rate the shares a buy.

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