Apart from the pandemic year of 2020, AB Volvo has delivered extra dividends every year since 2019. These extra dividends have always been at least as large as the regular dividend, and in recent years even larger. There are now voices that Volvo’s magnificent dividend train is over for this time – that the train has now reached its final destination after many years.
Volvo’s dividend in 2026?
This spring, Volvo did it again. For the fifth year in a row, the board hammered through the largest Swedish dividend. Almost 38 billion SEK was distributed to the owners. The year before, the sum was 36.6 billion.
Since the turn of the millennium in 2000, there have been mainly three companies that have fought among themselves to issue the largest dividend in kronor. Nordea, Telia, H&M and then Volvo. This is the total money bag I’m talking about, and has nothing to do with kronor/share or dividend yield.
For me, it is extraordinary how Volvo has been able to offer such a high dividend yield in combination with how nicely the dividend has been raised since 2018. It is truly unusual.
What I’ve noticed is that there are now voices starting to be heard that the dividend in Volvo will not be as spectacular next year. Volvo’s dividend in 2026 may be in danger.
Previous forecasts made at the beginning of 2025 showed a new dividend record of SEK 19/share , i.e. 50 öre more than the previous year.
Expectations have since been adjusted significantly. Volvo has been greatly affected by tariffs, increasing investments and negative currency effects. All of this has put a damper on what Volvo can deliver next year.
In July, Bank of America released an analysis update outlining SEK 13.5/share to be distributed in 2026. Analyst firm Citi is a little more positive and says SEK 14.5.
If we weave together the analysts’ expectations and calculate an average, we end up with SEK 14.8 /share for the 2025 financial year. In other words, almost SEK 4 lower than this year’s dividend.
I personally think that Volvo entered the year with a net cash flow of 85.7 billion in industrial operations. Of these, 37 billion have been distributed, but there is still plenty to take away. I still have no idea how the investments in the US will affect the cash flow.
Even though we expect a low 14.8% dividend for 2026, Volvo is trading at just over 5% dividend yield based on today’s price. That’s not a shame considering that Volvo will most likely be a great investment beyond the dividend in the coming years.
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