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Tele2: Massive Dividends, But Too Expensive At This Time

Published Thu, 15 Oct 2020 09:50:27 -0400 on Seeking Alpha

Seeking AlphaDividend Ideas | Tech  | SwedenTele2: Massive Dividends, But Too Expensive At This TimeOct. 15, 2020 9:50 AM ET|| About: Tele2 AB (publ) (TLTZF), TLTZYby: Wolf ReportWolf Report Long Only, Value, Growth, Growth At Reasonable PriceSummaryIn early 2020, most Swedish companies postponed their dividend proposals and withdrew guidance, regardless of sector. Tele2 was one of them.
As of 2Q20, guidance is reinstated, both dividend and extraordinary dividend are reinstated, and the company has yielded massive dividends for the year.
Patience has rewarded investors with very stable development in the company - and this is set to continue, with Tele2 as a 5G leader in its home markets.
Still, due to valuations, Tele2 is no more than a "HOLD" at this time.
The time has come to look at Tele2 (OTCPK: TLTZF) (OTCPK: TLTZY) again, and in doing so updating the company's prospects going into 3Q20. A few notable items and occurrences have happened during 2Q20 and after, with the more significant ones for dividend investors having happened as I write this article.
I view it as a good time to update my overall thesis on Tele2 and make sure investors go into the company with both eyes open and my opinions on where the company goes from here.
Let's look at the results.

Tele2 - How has the company been doing?
If you recall my last article on the company, or more in general, on dividends from Scandinavia, Tele2 was among the companies that canceled or postponed at least part of their 2019 dividend, payable 2020. Well, as of the publication of this article, the original dividend proposal, including the 3.50/SEK extraordinary dividend, has been paid out.
For investors who held the company through the worst of it, that means a dividend yield of at least 8-9% for the year, with my personal cost basis meaning a yield of almost 11% for the full year. Not a bad piece of return for a single year for one of the nation's biggest telcos.

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