Invest in Finland

Shares in Finnish companies remain attractive

15/08/2008

Shares in Finnish companies remain an attractive investment proposition because current share prices are low despite many companies’ paying out good dividends and producing sound financial results.

A recent study of Finnish companies listed on the OMX stock exchange by financial analysts Balance Consulting shows that currently the median dividend yield has increased to 5.4%. This figure is high compared to other European stock exchanges and it is expected that good dividends will continue to be paid out in the coming spring.

According to Tomi Sali from the Finnish share investors’ organization Osakesäästäjien Keskusliitto, now is a good time to invest in Finnish companies. He believes that even if the share prices of the companies are not expected to rise significantly at the moment, the dividends are expected to remain good, making investment in shares very competitive compared to fixed-term deposit accounts.

According to Henri Elo, an analyst at Business Consulting, major companies like Kesko, Rautaruukki, YIT and SanomaWSOY will probably still be increasing their dividends next year, even though their share prices are currently quite low.

Elo points to the example of Kesko which has a lot of funds after selling the TähtiOptikko chain, Kauko-Telko, K-Rahoitus and various properties. If Kesko does not make any business acquisitions, the dividend may increase even if the financial result falls, says Elo. The dividend on Kesko’s B-share was 8.9% at the end of July.

According to Elo, Rautaruukki has few debts and its result is expected to improve. This should increase the dividends next spring, although the dividend yield is now already at 8.5%. Other companies that are traditionally viewed as paying good dividends include Stora Enso, UPM, Outokumpu, Huhtamäki and Lemminkäinen.

Source: Kauppalehti 4.8.2008