A Look at Ericsson’s Financial Metrics
Ericsson (ERIC) currently has a dividend yield of 1.2%, or $0.0175, which indicates an annualized dividend payout of $0.07. Ericsson has a dividend payout ratio of 226.2%, and its dividend yield has fallen at a CAGR (compound annual growth rate) of 10.6% over the last three years.
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At the end of 2Q17, Ericsson had a cash balance of $4.1 billion, operating cash flow of $2.0 billion, and levered cash flow of $1.6 billion. Its total debt is $3.8 billion, indicating that its cash balance can easily meet interest and debt requirements.
ROA, ROE, and PE
Ericsson’s ROA (return on assets) is -0.16%, and its ROE (return on equity) is -10.5% due to its negative profitability. Its forward PE (price-to-earnings) ratio is 22.72x. Peer companies Nokia, Cisco Systems, and Juniper Networks have forward PE ratios of 16.47x, 13.17x, and 12.11x, respectively.
Ericsson has generated returns of -21.0% in the trailing 12 months compared to 17.8% for the S&P 500 (SPY). ERIC is currently trading at $5.68, which is 17.6% above its 52-week low of $4.83 and 24.0% below its 52-week high of $7.47.