As global markets face volatility and economic uncertainties, the Swedish stock market has not been immune to these broader trends. Despite these challenges, dividend stocks in Sweden continue to offer attractive yields for investors seeking steady income streams. In this article, we will explore three Swedish dividend stocks yielding up to 6.4%, focusing on their potential for providing reliable returns amid current market conditions.

Top 10 Dividend Stocks In Sweden

Click here to see the full list of 25 stocks from our Top Swedish Dividend Stocks screener.

Let's review some notable picks from our screened stocks.

Axfood

Simply Wall St Dividend Rating: ★★★★★☆

Overview: Axfood AB (publ) operates in the food retail and wholesale sectors primarily in Sweden with a market cap of SEK56.69 billion.

Operations: Axfood AB (publ) generates revenue from several segments, including Dagab (SEK75.09 billion), Willys (SEK44.82 billion), Snabbgross (SEK5.38 billion), Joint-Group (SEK1.45 billion), and Home Purchase (SEK7.67 billion).

Dividend Yield: 3.2%

Axfood's dividend payments have been stable and reliable over the past 10 years, with a current yield of 3.24%, which is lower than the top quartile in Sweden. The company's payout ratios indicate sustainability, as dividends are covered by both earnings (76.8%) and cash flows (39.3%). Recent earnings reports show steady revenue growth but a slight decline in net income for Q2 2024 compared to last year.

• Unlock comprehensive insights into our analysis of Axfood stock in this dividend report.

• The analysis detailed in our Axfood valuation report hints at an inflated share price compared to its estimated value.

Softronic

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: Softronic AB (publ) offers IT and management services primarily in Sweden, with a market cap of SEK1.09 billion.

Operations: Softronic AB (publ) generates revenue primarily from its Computer Services segment, which amounted to SEK838.92 million.

Dividend Yield: 6.5%

Softronic's dividend yield of 6.49% ranks in the top 25% of Swedish dividend payers but is not well-covered by free cash flows, with a high cash payout ratio of 94.5%. Despite earnings growth of 34% over the past year, its dividends have been volatile and unreliable over the last decade. Recent Q2 results showed modest sales growth to SEK 206.8 million and net income improvement to SEK 14.6 million compared to last year.

• Take a closer look at Softronic's potential here in our dividend report.

• According our valuation report, there's an indication that Softronic's share price might be on the cheaper side.

AB Traction

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: AB Traction is a private equity firm focusing on distressed, middle market, later stage, mature, bridge, recapitalization, buyouts and PIPES investments with a market cap of SEK3.64 billion.

Operations: AB Traction's revenue segments consist of SEK39.90 million from Unlisted Holdings, SEK122.90 million from Active Listed Holdings, and SEK280.20 million from Financial Investments/Other.

Dividend Yield: 4.2%

AB Traction's recent Q2 earnings showed a significant turnaround with net income of SEK 215.5 million compared to a loss last year, and basic earnings per share rising sharply. However, despite its dividend yield of 4.25% being among the top in Sweden, the dividends have been unreliable and volatile over the past decade. The payout ratio is low at 36.1%, but high cash payout ratio (94.1%) raises concerns about sustainability given that dividends are not well covered by free cash flows.

• Click here to discover the nuances of AB Traction with our detailed analytical dividend report.

• The valuation report we've compiled suggests that AB Traction's current price could be quite moderate.

Taking Advantage

• Get an in-depth perspective on all 25 Top Swedish Dividend Stocks by using our screener here.

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Looking For Alternative Opportunities?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.

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• Find companies with promising cash flow potential yet trading below their fair value.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include OM:AXFO OM:SOF B and OM:TRAC B.

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