Current Report: Telefonaktiebolaget L.M. Ericsson Set To Grow Maybe 12.85% In A Year

The company was founded in 1876 and is headquartered in Kista, Sweden.

Telefonaktiebolaget LM Ericsson (ERIC) provides telecommunications equipment and related services to mobile and fixed network operators.

Three key data points gauge ERIC (or any dividend-paying entity):

(1) Price 

(2) Dividends

(3) Returns

Those three keys also indicate if any company has made, is making, and will make money.

ERIC Price

LM Ericsson’s single share price grew $1.85 (or about 25%) from $7.49 to $9.34 in the past year, per Friday’s closing market report.

Seven analysts cover the stock. And their consensus suggests the price will grow $0.33 in the coming year. However, the ERIC past three-year price history shows an average $1.40 annual price gain. I’ll average the three-year and analyst estimates for ERIC at an $0.865 annual return, after I discuss dividends.  

ERIC Dividends

LM Ericsson has paid dividends since July 1981. The most recent SA dividend of $0.1663 has yet to be paid (to shareholders of record April 2nd, yielding 3.56% annually (per Friday’s closing market report)

ERIC Returns

Putting it all together, as of July 24th, a possible gross gain of $1.20 was projected. The $0.865 per share averaged analyst and 3-year annual gain was added to the $0.3326 forward-looking annual dividends to make that $1.20 gross gain.

A little over $1000 invested in Telefonaktiebolaget LM Ericsson at Friday’s $9.34 closing share price would buy 107 shares, which multiply the $1.20 gross gain to $128.48 for the coming year, or about 12.85%.

My dividend dogcatcher rule is to only buy initial shares of a dividend stock that pay an annual dividend (from $1000 invested) that is greater than the cost of one share.

Telefonaktiebolaget LM Ericsson’s projected annual dividend from $1K invested is $35.60. ERIC shows an annual dividend which proves to be 3.8 times more than the recent  $9.34  single-share price.

The exact track of ERIC’s future share price and dividend will entirely be determined by market action and company finances.  

Remember, the best way to track stock performance and dividend payments is through direct ownership of company shares.