Recent Buy – Nordea Bank

On May 6th I purchased 150 shares of Nordea Bank (NDA) for 7,05 € per share plus commission. The total cost of the purchase was 1 064 €.

Overview

Nordea is a Nordic financial service group that is based in Helsinki, Finland. The bank is the result of mergers and acquisitions of several Nordic banks. They operate in 20 countries and serve about 11 million private and 700 000 corporate customers.

Nordea is the leading financial services group in the Nordic region and one of the largest banks in Europe.

About The Stock

The stock has been on a downward trend for a long time. European banks are struggling with historically low interest rates and the bank is also facing some money laundering claims. The current price is about 30 % below 52 week high. As a result the stock is offering almost double-digit yield.

Some statistics about the stock:

  • Sector: Financial
  • EPS: 0,76 € (2018)
  • P/E Ratio: 9,3
  • P/B Ratio: Book value per share is usually a good measure for bank stocks, which is why I wanted to add this here. Current P/B ratio is 0,87, which means that the stock is currently trading below book value.
  • Yield: Pays an annual dividend of 0,69 € per share which equals 9,79 % yield.
  • Payout ratio: Dividend payout ratio is 91 %, which doesn’t leave much room for dividend growth. 
  • Dividend History: Nordea has increased dividend for 7 consecutive years.
  • Dividend Growth Rate: Average dividend growth rate over the last 5 years is 5,2 %. 

Nordea’s dividend is a bit riskier than I would like, but the stock is also really undervalued. They have invested over billion euros in digitalization, which should bring down costs and increase efficiency in the coming years. 

Summary

Nordea was already a part of my portfolio. With current yield it increases my annual passive income by 103,5 €. After the purchase weight of NDA is 4,7 % of my portfolio.

Have you purchased any stocks this month? What do you think about this buy? Please share your thoughts in the comment section below!

Thanks for reading.

 

2 thoughts on “Recent Buy – Nordea Bank

  1. Snugfortune Reply

    When it comes to European banks, I’ve been looking at Danske Bank when the money laundering issues came to light in November last year.
    Back then I decided to stay at the sideline. But in general I like banks. I own an overweight position in JPM (+ a smaller position in BAC).
    Thanks for providing some information about Nordea.
    -SF

    • Dividend Deluge Post authorReply

      Fortunately Nordea handled less than a billion euros in suspicious transactions, which is just a small fragment of Danske Bank’s estimated amount (~200 billions). I still think this is a riskier stock than most of my holdings.

      Thanks for the comment!

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