AB Volvo has recently presented their Q3 report. Now that we know the results for the majority of the year, we can read what the trucking giant will give as a dividend next year. Much points to the fact that the dividend for 2024 could be good with a dividend yield of close to 8 to 9 %.
Volvo dividend
2023 they distributed SEK 7/share + SEK 7/share in extra dividends. Considering the ordinary dividend alone, we therefore see an incredible dividend growth.
In recent years, Volvo has been talked about for its gigantic extra dividends. A limited liability company works so that you rarely want to sit on an excessively large pile of money. If you don’t have big investments in sight, then you rather distribute the money. Then we investors get to decide for ourselves whether we want to reinvest these in Volvo.
Here we see Volvo’s dividend history:
If you study the picture above, the extra dividends have even been larger than the regular ones. In 2022, Volvo also distributed an “extra extra dividend” which refers to the distribution of the proceeds from the sale of UD Trucks.
Volvo dividend 2024
This year, Volvo therefore distributed SEK 14/share, which corresponds to SEK 28 billion, with almost 100% probability, the dividend could be even bigger next year.
According to analysts, it is reasonable with SEK 20/share, or a total of SEK 40 billion as 2023 will be a record year. Such a fat number would mean almost 8 to 9% dividend yield based on today’s share price.
Speaking of the share price, there are probably many who think that Volvo is expensive as the share price has risen more than much else recently. Of course, it does not work that way when the profit has also risen during the same period. P/E today is just over 10 and that is not very much considering what the company has been valued at historically.
I have owned Volvo shares earlier, however now that I changed my strategy and focusing on dividend growth, so its time to buy in slowly…
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