Swedish Dividend Aristocrat Castellum shocks with dividend suspension

In a rather shocking announcement Sweden’s real estate company Castellum AB announced that it will pause its dividend payments. Castellum had the best track record of all REITs in Sweden with 20+ consecutive years of dividend growth.

In a press release dated November 15, 2022, Castellum announced that its board of directors will not propose that the upcoming Annual General Meeting resolves to pay any dividends. 

"We are experiencing turbulent times with major uncertainties on the financial market also going forward. In this exceptional situation, we consider that prioritizing a strengthened balance sheet and safeguarding the company's credit rating is what is most favourable for both the shareholders and the bondholders, although the decision to propose that we break the tradition of paying dividends is unpleasant", says Per Berggren, Chairman of the Board of Directors, Castellum AB.

CASTELLUM AB DIVIDEND HISTORY

• Years of increased dividend: 24
• 2022 dividend hike: +10.1%
• Market cap: SEK 46.2B ($4.4B)
• Dividend yield: 5.7% (as of Nov. 25, 2022)
• Dividend frequency: Quarterly
• Next ex-dividend date: December 29, 2022

The resolution does not entail any changes to the dividend that has already been resolved upon, with record date 30 December 2022, and Castellum's dividend policy remains unchanged. Castellum has been a favorite for many dividend investors in Europa with a streak of more than 20 years of consecutive dividend hikes. Castellum switched to a quarterly dividend payment earlier this year. In Europe a quarterly dividend is rare, and Castellum was one of only a few companies to pay four dividends every year. The current quarterly dividend by Castellum is SEK 1.90 per share. As mentioned above the last SEK 1.90 dividend will be paid on January 4, 2023 with ex-dividend date December 29, 2022. Based on this dividend the dividend yield for Castellum is 5.8% at a stock price of SEK 134.60.

Castellum AB's stock has lost 45% in Sweden in 2022.

Many other real estate stocks in Europe have been cutting their dividend the last couple of years with Castellum being one of only a few remaining stocks with a pristine dividend track record. Actually Castellum hiked its dividend for the 24th consecutive year in 2022. Also the company switched to quarterly dividend payments, following many other real estate stocks in Sweden. Another big name in Europe suspending its dividend in 2022 is Orpea from France. This retirement real estate company also was known for its superb dividend trackrecord a couple of years ago.

Castellum is one of the largest listed property companies in the Nordic region that develops flexible workplaces and smart logistics solutions. The property portfolio of Castellum AB comprises commercial real estate, including offices, public sector properties, warehouses and logistics properties, retail properties and light industry properties, covering approximately 4.3 million square meters of total leasable area. As of 30 September 2022, the property value of Castellum totalled approximately SEK 186 billion, including the ownership share of the Norwegian company Entra ASA. Castellum is the only Nordic property and construction company elected to the Dow Jones Sustainability Index (DJSI). The Castellum share is listed on Nasdaq Stockholm Large Cap.