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NN Group: A 7% Dividend Yield (And Increasing)

Published Sat, 27 Jun 2020 11:35:00 -0400 on Seeking Alpha

Seeking AlphaDividend Ideas | NetherlandsNN Group: A 7% Dividend Yield (And Increasing)Jun. 27, 2020 11:35 AM ET|| About: NN Group N.V. (NNGPF), NNGRYby: The Investment DoctorThe Investment Doctor European Small-Cap IdeasWe zoom in on capital gains and dividend income in European small-capsSummaryNN Group currently pays a 7% dividend yield, but the recent capital markets day was eye-opening.
The company aims to further increase its dividend while executing on a 250M EUR annual stock buyback.
This could push the dividend yield to 9-10% by 2023 based on the current share price.
The majority of the portfolio consists of debt securities, so COVID-19 should only have a small impact on the portfolio.
Introduction
NN Group (OTCPK: NNGPF) (OTCPK: NNGRY) is a Dutch insurance company active in 18 countries. It has been a steady and reliable dividend payer but NN had to deal with increased shareholder activism in the past few years and the recent announcements on the capital markets day last week seem to indicate NN Group is about to get much more shareholder friendly with higher dividends and share repurchases, which will hopefully boost the share price.

Source: Yahoo Finance
NN Group has a very liquid listing on Euronext Amsterdam where it's trading with NN as ticker symbol. The average daily volume is approximately 1.5 million shares. The current market capitalization is approximately 9.8B EUR. As NN Group trades and reports its financial results in Euro, I will use the EUR as base currency throughout this article.
A quick glance at NN Group in 2019
Before discussing the events of the capital markets day and how those will have an impact on the shareholders, let's first have a look at how NN Group performed in 2019 (we still have to wait for the detailed financial results in H1 2020 which will be published during the summer).
In 2019, NN Group received approximately 10% more in gross premium income, which increased to 14.5B EUR. The total... Read more