To explain Fortum briefly, it is an energy company with assets primarily in nuclear power and hydropower. 46% of the electricity produced is on Finnish soil and the rest in Sweden.
In 2024, the company generated electricity that accounted for approximately a quarter of Sweden’s and Finland’s combined electricity production. In addition, Fortum is engaged in electricity trading and is the largest company in the Nordic region in the area with 2.2 million customers.
Over half of the production comes from nuclear power. Hydropower accounts for 44%, and there is some coal power and wind power, which is less important for Fortum at the moment.
Fortum as a dividend company
Many people look at Fortum today and realize that the dividend yield is well over 8%. Unfortunately, that is a modified truth. This year, the company paid out EUR 0.9 in ordinary dividends and EUR 0.5 in extra dividends (total 1.4). Calculated on ordinary dividends alone, the dividend yield is 5.3%.
Unlike many others, they are not going down the path of trying to expand more wind power and solar power, but will focus on other fossil-free power production, electricity trading and district heating. For example, they have divested some of their recycling and solar power in India in recent years.
Fortum currently has a wholly owned nuclear power plant in Loviisa, Finland, where it is the operator. It is also a partner in another Finnish nuclear power plant, as well as in Oskarshamn and Forsmark on Swedish soil. In the latter two, it is only a minority shareholder.
There will probably be some type of change in the ownership of our Swedish nuclear power plants. For example, the EU has issued a requirement that the German state (via Uniper) should reduce its ownership to 25% by 2028. This includes, among other things, Oskarhamn, where Uniper is a major owner. In such cases, this would open up opportunities for Fortum to buy in, and Fortum itself has shown interest in this.
The disadvantage is, of course, that such a large investment would drive up debt significantly and likely put pressure on dividends for some time.
Fortum currently has a dividend policy that shows that 60-90% of profit/share should be distributed. Counting on more than 0.9 EUR in the years to come will probably be difficult and the question is whether Fortum can even maintain the regular dividend now that electricity prices are the way they are. Perhaps 0.8 EUR is a more reasonable idea.
For Fortum, much is about electricity prices going forward. If we look at the future prices for electricity in 2026, it points to 0.45 öre/kWh for electricity price area 3 and 0.21 öre for electricity price area 2. Then it is just a prophecy about the future and none of it needs to come true. However, based on the figures, it looks like we are entering a period of lower electricity prices again.
The advantage is that the Finnish state (which is Fortum’s main owner) is said to want a high dividend from Fortum.
Fortum is an interesting stock to own that could clearly benefit if nuclear power gets more focus in the future, which I personally believe could be a scenario. Then I think the stock felt more interesting when it traded at a 7-8% dividend yield, which has actually been the average for a long time.
Busy And Useful 