I increased my holdings in this monthly dividend paying company on 11 September 2019. TransAlta Renewables is a renewable energy infrastructure company headquartered in Calgary, Alberta and is traded in Canadian Dollars. TransAlta renewables is the renewable energy subsidiary of TransAlta Corporation. The parent company owns roughly 61% of TransAlta renewable’s stock.

Majority of the company’s revenues comes from power generation from wind turbines (46%) and natural gas (47%). It has access to growth capital through the capital markets as well as their parent company; TransAlta Corporation. Find enclosed an investor presentation from May 2019.

Dividend: As mentioned the company pays out a monthly dividend and the current yield is ~7 %. I don’t believe the dividend will increase in the coming periods, but due to the contract length of their assets I believe that the current dividend is sustainable and attractive at these levels. The monthly dividends, stable income and low volatility gives the stock characteristics of a fixed income security, which is a great component for any portfolio.

Historically, the dividend has a 5 % annual CAGR, but the dividend did not increase from 2017 to 2019 suggesting that the future increases will be as great as in the past.

I bought my first shares in Securitas at 147 SEK on the 10 September 2019. The share price reacted very negative on Q2 2019 – figures. I believe the company is well managed, has a stabile growth outlook due to increased urbanisation, promising acquisitions and necessary investments in security technology.

The company was established back in 1934 as Hälsingborgs Nattvakt and has since then grown to become a world leader in security services. Investment AB Latour entered as owners of the company in 1985 and under their ownership the company developed into a multinational corporation. The market for Securitas’ services benefits from the megatrend of urbanisation which support the companies growth outlook. Securitas is investing heavily in security technology and are making acquisitions in order to meet the rapid pace of transition to security solutions that combine on-site and mobile guarding with various forms of electronic security.

Megatrend: Urbanisation. Rapid urbanisation will most likely have the greatest impact on how and where humans live. People leave the countryside and migrate to cities. Combining urbanisation with increasing demand for improved standard of living for emerging economies and an increase in the world’s population results in megacities and the need to rethink how cities are built. Securitas will benefit from this megatrend since there are higher crime rates in cities than in rural areas.

Dividend: The company has increased its dividend the past four years and their dividend policy is to distribute 50-60 % of annual net income to its shareholders. Historically, the company has paid a steady dividend and has also distributed shares in Loomis and Assa Abloy.

  • Current dividend yield: 3.0 %
  • Dividend payout ratio: ~50
  • Return on equity: ~17 %
  • Equity ratio: ~29%
  • Net debt / EBITDA: 3.0
Securitas security Las Vegas

Healthcare is a broad description for many industries, and for retail investors it is sometimes hard to understand what a healthcare company is actually selling, producing or developing. Companies in this sector are also in various business cycle stages. From mature companies with stable income and broad products or services to companies with no income and a single product under development. But overall; healthcare is considered a defensiv sector, and this is what’s making the sector attractive for many investors.

I will in this article present 5 Nordic Healthcare companies worth taking a closer look at! A common feature for these five companies is that they are all highly profitable companies, and all will benefit from structural growth and megatrends in years to come. Declining global fertility rates, rapidly aging world population and increased spending on technology in the healthcare sector are structural changes that affects us very slowly but will change our society the most in the coming decades.

Source: visualcapitalist.com

But first, how did I select the five companies?

I started out screening Nordic companies within the healthcare sector on various financial ratios such as dividend growth, payout ratio, net debt / EBITDA and EV / EBITDA. By doing so I eliminated every non-profitable healthcare – company and found the companies that are worth spending anymore time on. Below is a table of the financial ratios extracted from borsdata.se and Yahoo Finance.

Company Dividend growth 5yDividend payout ratioNet debt / EBITDAEV / EBITDA
Boule Diagnostics 29.7 %50 %3.523.0
Vitrolife 23.2 %27 %(0.9)35.5
Biotage14.9 %56 %0.828.4
Novo Nordisk 10.3 %52 %(0.2)15.3
Medistim 10.0 %56 %(0.2)28.1

#1. Boule Diagnostics

(disclaimer: I hold a position in the company)

About the company: Boule Diagnostics AB, founded in 1956, is a global diagnostics company that develops, manufactures and markets instruments and consumable products for blood diagnostics. The company serves hospitals, clinics, laboratories and companies within blood diagnostics, in both human and veterinary haematology. 

Boule operates mainly in the decentralised haematology segment, which consists of smaller hospitals, clinics, laboratories and healthcare centres. The company sells its products directly in Sweden and the United States, as well as through distributors internationally.

Bilderesultat for boule diagnostics

Link to my past write-up on the company can be found here: Boule – adding a MedTech-company to my portfolio.

#2. Vitrolife

About the company: Vitrolife, founded in 1981, is an international medtech group that develops, produces and markets fertility treatment products as well as cell therapy and tissue engineering, organ transplantation systems, and products based on hyaluronic acid. It operates in Europe, the Middle East, and Africa; Asia; Japan and Pacific; and North and South America.

The company benefits from a societal trend of postponing childbearing, both in Western countries as well as Emerging countries. Global market growth in the IVF area, measured in monetary terms, is estimated to 5-10% per annum. Growth is driven by the growing middle class, the fact that parents-to-be choose to try to have children later in life, greater social acceptance of IVF and increased use of technology in IVF treatments.

Bilderesultat for vitrolife product

Link to my past write-up on the company can be found here: Vitrolife – profitable growth, but skyhigh valuation

# 3. Novo Nordisk

Relatert bilde

Novo Nordisk, founded in 1925, is a Danish healthcare company with a global presence within diabetes care, haemophilia, growth disorders and obesity. It is the largest listed company in the Nordic equity markets, in terms of market capitalisation.

The company will benefit from an ageing population, since nearly all type 2 diabetes patients are diagnosed after the age of 45 and many after 65, as well as lifestyle changes that translate into higher rates of the conditions of overweight, obesity, pre-diabetes and diabetes (type 2).

Bilderesultat for novo nordisk

The company operates in two segments, Diabetes Care and Obesity, and Biopharmaceuticals. The Diabetes Care and Obesity segment provides products in the areas of insulins, GLP-1 and related delivery systems, oral anti-diabetic products, obesity, and other chronic diseases. The Biopharmaceuticals segment offers products in the areas of haemophilia, growth disorders, and hormone replacement therapy.

#4. Biotage

Bilderesultat for biotage

About the company: Biotage is a global Life Science company that develops instruments and consumables solutions for analytical, organic and peptide chemistry. It sells its products to government authorities, academic institutions, contract research and contract manufacturing companies, pharmaceutical and food companies. They have developed a lot of products and software for their three segments; Organic chemistry, analytical chemistry and industrial products.

The company has recently acquired PhyNexus, which will add competence and a product portfolio of equipment within the high growth niche; biomolecules (pharmaceutical industry).

Bilderesultat for biotage

Biotage Organic Chemistry products are used in research to effectively produce and purify the base substances of new pharmaceuticals. Biotage Analytical Chemistry products are used by organizations such as hospitals and commercial research labs to purify, for example, blood, soil or foodstuff samples before they are sent for final analysis. Biotage Industrial Products are used to purify or separate substances on an industrial scale, for example, in the pharmaceutical and food manufacturing industries. They are used in manufacturing processes as well as process development. An example of this is the purification of citric acid from pesticide residues. (Source: annual report 2018)

#5. Medistim:

Bilderesultat for medistim

About the company: Medistim ASA is the only Norwegian company on this list. The company develops, produces, services, leases, and distributes medical devices for cardio-vascular surgery in the United States, Europe, Asia, and internationally. It operates through three segments: Lease of Equipment, Capital and Consumable Sales, and Distribution and Sales of Third Party Products.

The company will benefit from an ageing population, since most cardiac surgeries are performed on the elderly population, but they will also benefit from lifestyle changes that translate into higher rates of the conditions of overweight and obesity.

Bilderesultat for medistim

The company offers MiraQ Cardiac, a system that combines ultrasound imaging and transit time flow measurement (TTFM) in a single system for cardiac surgery; MiraQ Vascular, a system that combines ultrasound imaging and transit TTFM in a single system for vascular surgery; imaging probes for intraoperative use; VeriQ C, a system that combines ultrasound imaging and TTFM in a single system for cardiovascular procedures; and VeriQ that offers TTFM and doppler velocity measurements for intraoperative blood flow and graft patency verification. The company also provides various flow probes, such as QuickFit TTFM probes to accurately measure blood volume flow intraoperatively in various range of surgical applications; Vascular TTFM probes for enhancing surgical outcomes; and doppler probes that are used on the surface of the heart/vessel to search for intramural coronary arteries or to locate the position and quantify the degree of a stenosis.

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In this post I will share my initial thoughts on Vitrolife and my investment thesis. I’m currently on the sideline due to the high valuation.

Vitrolife is an international medtech group that develops, produces and markets fertility treatment products as well as cell therapy and tissue engineering, organ transplantation systems, and products based on hyaluronic acid.

Vitrolife is listed on Nasdaq Stockholm Large Cap and the current market cap is around 18 billion SEK.

Megatrend: The company benefits from a societal trend of postponing childbearing, both in Western countries as well as Emerging countries.

Global market growth in the IVF area, measured in monetary terms, is estimated to 5-10% per annum. Growth is driven by the growing middle class, the fact that parents-to-be choose to try to have children later in life, greater social acceptance of IVF and increased use of technology in IVF treatments.

Dividend history:

Vitrolife has increased their dividends at a high rate the past couple of years, but the share price has also increased from very low levels which results in a dividend yield of only 0.5 %. On the other hand, I expect the dividend growth over the coming years to offset the low dividend yield today. I expect the dividend for the fiscal year 2019 to be 1 SEK (30% of EPS 3.3 SEK) resulting in a dividend yield of 0.63 % (increase of 17.6%). Key measures support the room for increasing dividends, but also allows the company to grow through organic growth and acquisitions.

  • Payout ratio: ~30%
  • Equity ratio: ~80 %
  • Negative Net debt / EBITDA

Valuation: Trades at EV / EBITDA of 36.4 and PE of 52 which is skyhigh, but the average return on equity the past five years is ~20%! But, given an reinvestment rate by the company of 70% and a return on equity of 20 % I believe that the company can defend this valuation.

TA: The stock is a sales candidate (downwards trend). 10 and 50 days MA has crossed 200 days MA and 100 days will soon also cross 200 MA. The stock has support around 160 SEK and 145 SEK. A break through 160 signals further decline.


A final remark is the possibility that William Demant A/S has increased their shareholdings in the company and now owns 22.6% of the company and rumour has it they are willing to make a bid on the entire company.

The real estate sector was downgraded by Pareto Securities today which resulted in a selloff in real estate companies.

I decided to increase my holdings in Castellum today at SEK 206.4 per share. The company has increased its dividends every year since its IPO in 1997 and will most likely keep on increasing its dividends, though not at the same pace as previous years. In their Q2 2019 report they reported an increase in property management income of 9 % and they have historically increased their dividends at the same pace as their increase in property management income.

Latest reported Net Asset Value was 184 SEK and current share price is ~205 SEK resulting in a premium of around 11.5%

The current dividend yield is 2.9% and next ex dividend date is 20 September 2019 (3.05 SEK per share).

Wärtsilä is a global leader and supplier of smart technologies and complete lifecycle solutions for marine and energy markets.

Initial interest August / September 2018 and the shares traded around EUR 17. This review was written in September 2018. I bought my first shares 17 January 2019 at EUR 14,15, increased my holdings on 14 June 2019 at EUR 12,89 and another pruchase on 18 July 2019 at EUR 10,83. Average cost price EUR 13,12.

For other investment journal entries go to my journal here!

Investment thesis: The IMO (International Maritime Organization) has finally decided that 2020 will be the date of an upper sulphur emission level of 0.5% compared to the previous 3.5%. By then, shipowners must decide whether to switch to LSFO (low-sulphur marine oil) or install scrubbers on the ships. This will have a major impact on the demand for marine fuel, which will have an adverse effect on the price of oil and refined products.

As a small proportion of the world fleet has installed scrubbers on their ships, the capacity of the suppliers of scrubbers is beginning to be strained, and as we approach the deadline, this will lead to a significant increase in demand for LSFO and thus the spread between gasoil and fuel oil will increase. Switching to LSFO is the preferred option for shipowners rather than installing scrubbers, who have had a wait-and-see attitude to see if the 2020 deadline is delayed or if there are other alternatives. It is now seen that larger orders are coming for scrubber installation and that shipowners suggest that the scrubber install time is low and installation will be a competitive advantage as they can continue to burn HSFO at a lower cost.

A survey by UBS found that only 2% of the global fleet will install scrubbers by 2020. 68% will burn LSFO, while 21% will install scrubbers. 9% will phase out new ships, while 6% will choose LNG. The survey also showed that only 64% of the fleet will meet the requirements for ballast water purification systems and sulphur emissions by 2020. Analysts estimate that the green shipping market could be worth USD 250 billion over the next five years.

Supplier capacity issues: Due to an increase in demand, it has become tight at scrubbers suppliers. At Wartsila, there is still room to install scrubber in 2019. The company’s orders increased by 14% in the second quarter and received a USD 198 million order from MSC. Alfa Laval experienced a significant increase in the number of orders where systems associated with scrubber accounted for a large part. Three major suppliers are Wartsila, Alfa Laval and Yara Marine.

The systems were first installed on cruise ships and ferries as they operate within discharge areas, but are now installed on bulk, tanker and container ships. Based on EGCSA data, 983 ships with scrubber exhaust systems were installed or on order as of May 31, 2018.

Technical analysis: Technically, Wartsila is a sales candidate with lower tops and bottoms. Trading around the support level at EUR 16.76 and a breach through the support level indicate further decline. The stock went through 200 days moving average. Death cross observed in mid-August and the stock has responded with a sharp fall afterwards. RSI of 30 supports the thesis that the stock is a sales candidate. (September 2018).

Investment checklist: Score 80

To read more about IMO 2020 I recommend the overview provided by the Visual Capitalist: https://www.visualcapitalist.com/imo-2020-the-big-shipping-shake-up/

Investing in ESG-companies has proven highly profitable the last year and one of the companies that has increased the most is Scanship Holding ASA. Scanship delivers technical solutions to the maritime industry (cruise ships, aqua culture etc) and the future is bright.

Today I offloaded my holdings in the company and the main reason is the increase in volatility. I want more stable companies with less flucations in my portfolio and the jury is still out whether the stock is overpriced or not. At NOK 19,1 per share I’m leaning towards the overpriced side (which is also supported by my DCF – calculations).

On 28 August the Q2 – results is published and I will still have an interest in the numbers reported as the company and its solutions are highly interesting.

Discounted Cash Flow – model updated 26.8.2019:

I have received quite a few questions from my followers about the underlying assumptions in my DCF-model posted on 20 August. In the slideshow below I have uploaded some of the assumptions and calculations from my simplified DCF-model.

Today I bought my first 150 shares in Equinor (buy and build) because of the attractive valuation of the company at these levels.

The dividend yield at current level is approx 5.5% and I expect the dividend to increase the next couple of years due to the oil and gas – field “Johan Sverdrup” coming into production. This will add an estimated NOK 1275 to my annual dividend income and increases the yield in my portfolio from 3.9% to 4.0%.

Comment from Pareto Securities (analysis dated 25 July 2019):

Q2 results were well below market expectations but fairly in line with our estimates. With what were known to be a weak quarter now behind us, we believe focus will shift to Equinor’s industry leading 2020-21e FCF yield of 11% (Brent USD 65/bbl) post Sverdrup production start later this year. We reiterate our BUY recommendation and TP of NOK 240.