Dividend-right share: Telia
On this page you can read about a strategy you can automatically follow on your own account if you are a client of NPinvestor Fondsmæglerselskab. In the box to the right, you can sign up to hear more about the strategy and about how it happens in practical terms when you want to follow a strategy.
The Telia algorithm uses the price fluctuation that exists in the Telia share by swing trading. At the same time, Telia pays a large part of the year’s profit to the shareholders, which is seen as holding a hand under the share price. In this robot strategy, you will be able to receive the company’s dividend, which depends on how many CFD shares are owned on the day of dividend payment and make use of the small fluctuations on the graph to take regular, small gains.
Following this strategy means no extra costs in addition to the normal trading costs.
The minimum investment in order to follow this strategy is 40000 SEK.
Description of Telia
Telia is a large, Swedish telecommunications company with a high dividend rate. The company is in a modern market with stable earnings and, consequently, meets the requirements our algorithms have to be able to swing trade a dividend-right share.
About the dividend:
Telia Company avser att dela ut minst 80 procent av fritt kassaflöde från kvarvarande verksamhet, exklusive licenser. Utdelningen skall delas upp i två lika delar och utbetalas vid två tillfällen.
Bolaget siktar på att ha en skuldsättningsgrad motsvarande måttet nettolåneskuld i relation till justerad EBITDA på 2x plus/minus 0,5x.
Bolagets kapitalstruktur skall fortsatt baseras på en solid kreditvärdering på lång sikt (A- till BBB+).
In other words, this means that the company pays out minimum 80 percent of the free cash flow from existing businesses, excluding licences. So, like many other telecommunications companies, the desire is to pay out a large part of the profit to the shareholders.
Telia has more than 26,000 employees and is, consequently, a giant in the Nordic region.
When the price drops slightly, then the algorithm gathers up in the share to sell when the share increases again.
The risk with this strategy is that the share could decrease substantially. For example, this could happen if the profits suddenly drop. The share may also decrease even without the reduction of the profits.
As described earlier, this is about a high risk strategy, as gearing of up to 3 is used, but the level can be set individually.
If the share drops significantly, the investor can lose his entire investment. This is about a high risk investment, given that gearing is used. However, the gearing can be set individually or removed entirely.
It must also be emphasised, that historical return and historical return percentages are no guarantee for future gains.
Risk warning: Trading with CFDs and currency involves a high risk of loss. A European survey has shown that 74-89% of retail clients lose money when they trade with CFDs.
Historical return is not a reliable indicator or guarantee for future return.