Dividend-right share: Topdanmark

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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.

Strategi

The Topdanmark algorithm uses the price fluctuation that exists in the Topdanmark share by swing trading. At the same time, Topdanmark 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.

Instrument

Topdanmark CFD

Finances

Following this strategy means no extra costs in addition to the normal trading costs.

Minimum investment

The minimum investment in order to follow this strategy is 30000 DKK.

Description of Topdanmark

Topdanmark is a well-run Danish insurance company the shares of which have increased sharply in the past 20 years. So far, the company has spent profits to buy up own shares, which has made the share increase sharply, but the strategy is now changed to the company paying out high dividends. This has stabilised the share so the latest year has shown stability but with fluctuation. This can be seen in a graph of the share in the first three quarters of 2018:

(Source: Google Finance)

According to the company’s own website, the Topdanmark share is characterised by:

  • Focused strategy
  • Danish stakeholder
  • Stable insurance risk
  • Low cost percent
  • Limited financial risk
  • Synergy between life and non-life insurance
  • Effective capital management
  • Limited top line growth
  • Profitable growth - in the mentioned sequence
  • High net results
  • No protection against a takeover in the articles of association

 

In addition, regarding the company’s dividend policy:

Topdanmark has a disciplined approach to capital so that capital that is not necessary in order to operate the business, is allocated to the shareholders and the accumulation of unnecessary capital is avoided.

The board has adopted a distribution policy by which distribution in the future will occur in the form of an annual dividend payment. Payment of dividends will take place immediately after the conclusion of the ordinary general meeting. The dividend will correspond to a pay-out ratio of at least 70%.

Risk

The risk with this strategy is that the share will 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 2.5 - 2.6 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.

If you are in doubt about how to follow a Copy Trader Master, then read more here https://npinvestor.com/da/ctm - or call us on +45 88300000

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.