Nokia’s Dividend Revival! $NOK Nokia Stock Outlook to 2023+! By Tre McKee & the Benevolent Investors

You're here to learn how Nokia can make you a happy investor so where today we're going to take a look at two different bits of news, as well as the capital markets, day investment, and I'm going to share some really exciting tidbits of what we have to look forward to going forward. Welcome back to the channel, my name is trey. Today we're going to be taking a look at Nokia if you're a Nokia investor, you know that it's been a bit of a rocky month check it out here on the charts we have lows down to like 390, something like that all the way up to 4 30ish, something like that and a lot of opportunities to be bringing your cost basis down over the last couple of months. This is the one-month chart typically uh. If you're new to the channel, I'm looking at six months, chart three year chart that kind of uh perspective um I don't like to get in and out of stocks too quickly. Uh and Nokia is very much one of those stocks where management is saying: hey we're actually going to suck this year, and probably even next year too, but going out after that things are gonna, start looking real good.

So if their first time here, you should know that I am an investor in Nokia, I think of it as one of my companies, and I'm going to be in it for many years to come. Um. Let me know down in the comment section: are you guys do you already hold Nokia? Are you just kind of getting into research to figure out? You know if you should get into it or not, and if you are new to Nokia, and you're, trying to figure out who they are, what they do, um, how many cell phones they aren't making anymore and stuff like that click up here on my first video, where I kind of went into the whole company structure and stuff like that, I also did another video last week which I'll be linking to up here, but in the description we'll link to all these different videos. If you want to be learning more about the company, so the first bit of really cool news that I want to share about um pukka landmark, the CEO, the new CEO, has been talking a lot about how Nokia is going to be number one in the world in their uh, targeted goal areas, and so for Nokia. That means providing the greatest service providing the highest tech, patents and patent licensing opportunities for their partners, like ATT and Turk telecom, who are going to be looking at right here, check it out.

Here we have an article from Yahoo Finance that says: Nokia achieves 5g speed world record with Turk telecom. They ended up hitting 4.5 gigabits per second, which is insanely beast mode, we're also in the Wi-Fi business here in Japan. I share a lot about that on my second channel we're talking about how we've built up Japan, Wi-Fi buddy from being a very small company into being a larger company. Obviously, tourism isn't really a thing right now. So it's on the back burner right now, but if you're thinking about coming to Japan, check out Japan, Wi-Fi buddy but anyways 4.5 gigabits per second granted, it was just to one device, and it was like on a private network for testing. So you'll probably never actually see speeds like this, but Nokia is able to do that without cables like 4.5 gigabits per second puts most cable to connections, to shame like it's like embarrassing. How fast that is compared to cabled alternatives, and they say Nokia has today announced that has achieved a 5g speed record during a trial with Turk telecom in Turkish capital city Ankara.

The record which reached over 4.5 gigabits per second is the first to be achieved on 5g, new radio, only 5g NR, utilizing Nokia's, air scale, 5g, ram solution on 26, gigahertz, millimeter, wave spectrum, 800 megahertz bandwidth and a single user device, and so this is one way like what pukka landmark keeps talking about is how we're going to be the best you know, and if they're constantly showing the world hey, we got the speed record. You want to be using us to set up your telecom. The second juicy bit of information is a deal they just made with ATT, which is a five-year deal, helping ATT, basically to figure out how to roll out their 5g network. One of the misconceptions right now, especially since the new iPhone came out, and it has 5g capability. There are already loads of android phones with 5g on them.

Um a lot of people think 5g is already here, and it's already set up the signal. Isn't that good, especially if you go into the countryside, but one of the things we need to keep in mind is that it's going to be rolling out basically until 2030 when 6g starts to roll out, so check it out here next generation access ushers in a gigabit world. So this is from their presentation earlier, where pukka landmark was talking about we're still early in the 5g cycle, so check it out.2020 2021 is kind of where 4g and 5g is going to be crossing over. So 5g very much still has a long road to go to be like the main network in most developed countries, and so since the 5g rollout is going to be coming over many years. This is going to be a huge revenue stream and in this case it's a five-year deal with at t where Nokia is going to keep making money over the coming years.

And we see a few more examples of this. Where telecom companies like at t come to Nokia and say: hey help us figure out our whole network infrastructure help us to optimize. It helps us to streamline it and in the article they talk about how they'll be helping at t and deploying their c band portfolio to boost network capacity in indoor and outdoor 5g coverage. So one of the complaints railed against 5g up until now has been that the range is just tiny. So you have to be in a really, really close distance to a 5g broadcasting tower or box to be able to get good coverage, but back in, like the 70s.

I don't know if you're old enough to remember, but we used to have these huge satellites in our backyards, um, which used c-band for the downstream for a lot of broadcast TV, and these things were like two three four meters across um and since then, c-band has kind of gone out of vogue and not really been used, but as 5g is rolling out, most places around the world have opened up c-band for 5g, because it has a really nice balance of speed. But it also has a really nice balance of broadcast area distance like physical distance, and so the US has been really far behind on this, because the government hasn't opened up c-band to be used by telecom companies. So they just did they ran an auction at t got a bunch of the spectra, so they go to Nokia, and they say hey. We have allowance to use these spectrums now. Can you help us figure out how to do that? Well, and so at t is going to be paying Nokia for five years going forward into the future and Nokia's typical clients.

Are companies like this, and so they're the networks that run everything we do basically and Nokia is the backbone behind all of those networks in previous videos. I've also talked about how the shift to software as a service, where all of us are doing everything through software over the internet. It's becoming more and more of a thing for all of us, especially if you're working from home, but it's going to be impacting the way we work and the way we communicate and the way we spend time with family and even the way we do medicine and like electors and all this stuff going forward. Software as a service is going to become more and more important for all of us going into the future generations, and Nokia is like the backbone of that whole system. Nokia is one of the biggest companies in the world enabling that to happen, and so next I wanted to go into the capital markets.

Today, it's basically an investor's day that Nokia holds. I wanted to talk a little about what pukka lumbar talks about, but I also wanted to go in more specifically and look at what Marco weaken talks about um as he's the CFO, and he's talking more about like specific finances stuff rather than big picture strategy stuff in last week's video. Uh click up here. If you want to check it out, I talked about how Nokia is looking to lean out their workforce by five to ten thousand people, thus saving huge amounts of euros and being able to redirect that money into r d, which is one of Nokia's. Strong points we'll see here in a minute how much r d and how much their patents contribute to the bottom line, but basically Nokia's on a mission to really lean down to become more efficient, more agile and really focus on the main profit centers and so going into that pukka talked about how our reset is already making a difference.

We're moving away from end to end as a cornerstone of our equity story, we're creating a new operating model, and we've defined a new group leadership team. And so I'm not going to get into too much of the nitty-gritty here, but basically restructuring the way the whole company works and looking at the different segments and how they have different account levels of accountability, as opposed to before it seemed like things weren't as closely monitored before, and so there were probably a lot of people who didn't need to you know the company didn't need to be paying to do a certain job or portions of the company being redundant or things like that. They're really trying to lean the company down and then, however, like this reset, is going to be taking place over the next couple of years. Check out this slide. Uh 2021 focus is the reset um 2022 and the midterm going forward, they're going to be switching into accelerating so increasing the digitalization of operations, enhancing margins through improved portfolio, competitiveness and technology, leadership, investments and then create growth opportunities through new products and services, and then, after that, scaling setting our sites on new value resulting from next generation critical networks like Oran, ran, cloud native software as a service, business models, etc.

And so not unlike one of the companies, I also talk about on this channel. Palantir clicks up here. If you want to see my playlist, it's probably not the best idea to be looking at Nokia as, like you know, I'm going to get in for like a month, get rich and retire. It's more like this is a two three four five year play, but if you stay in it, you might be like dude. I bought that stock for four bucks in 2021, and now it's like 20.

Or now it's like 40, or something crazy like that um, which really isn't absurd. You know- and I think even right now for the moment, the company should be valued at like five or six bucks, not four. If you compare to the competition like Erickson and stuff like that in terms of how they're slimming down and their different strategies for going forward. So moving on to the CFO's presentation, he has a little more nitty-gritty stuff that might be more exciting for the more numbers centric of you watching check it out fundamental change in our operating model from end to end. To best of breed from complexity, to streamline focus on customers and value creation, from heavy corporate to lean corporate, from unclear accountability to four empowered and accountable business groups and then from additional r d needed to prioritization of r d, so think about it as like, a big sluggish behemoth, slimming down into being something that's much more agile, much more focused on r d and being like laser focused on being the highest tech number one that everybody looks at as like.

Obviously you would go to Nokia for this solution. I mentioned a second ago how I was talking about how they're streamlining all the different business groups in this next slide. They say we have established change momentum so on the very left there, it shows basically customers going to Nokia, customer experience and Nokia customer experience figuring out how to help the customer in the best way possible, rather than saying oh for that problem call bob over there and for that problem. Call martin, in that other department kind of thing, like it's just much more streamlined and probably going to be a smoother and easier experience for clients too, and that middle portion of the slide. There say they say a lean corporate center so rather than corporate ownership and control like it was last year, they've switched over a massive amount of the revenues into business group, ownership and control.

So what happens when the specific business group has much more flexibility to do? What they need to be doing? Is that there's less red tape? They can get things done quicker. They don't have to like. You know, deal with all these different groups before they can start getting stuff done. They just get it done, and it's more profitable going on the next slide. Marco talks about clear capital allocation policy leads to strong capital structure and technology leadership.

So he says our primary focus is to deploy our capital towards organic or integral inorganic investments to ensure technology leadership in areas where we have a clear path towards creating shareholder value, while maintaining a strong capital structure and prudent financial strategy, he says the investor isn't the focus, which is something I keep talking about with Palantir, which is something Elon Musk talks about all the time. My goal, our company's goal right now, is not to make you rich. Our company's goal right now is to set ourselves up to be dominating in our industry, and when we do that automatically shareholders will be proud. The shareholders are going to make money, and that shift is something that I'm so excited about in Nokia. Going on to number two, our next priority is to provide shareholders with capital returns.

That's what I love to see my goal- and this is one of the complaints railed against Wall Street. Basically, is that companies are rewarded for prioritizing short-term gains. Hey this quarter, we earned two percent hey this quarter. We earned three percent awesome share. Price goes up cool, good job, guys at the expense of you, know, investing in high-tech investing in AI and things like that going forward, and so um Nokia is basically saying: hey.

Forget that we're going to stop focusing on giving you guys a little of gain because it hasn't worked for us for the last many years, we're going to focus on becoming number one now and then you guys are going to win in the long run anyways and then probably, why a lot of you clicked on this. The natural result of starting to kick ass is that a dividend can come back. We target recurring stable and overtime, growing ordinary dividend payments, taking into account the previous year's earnings, as well as the company's financial position and business outlook, and in an industry like this. Yes, there are huge amounts of outlays required. There are huge amounts of expenses required to set up these networks, but you have deals like this with ATT, where it's like they're going to be paying us for five years.

So when we calculate all these different people who are paying us long term, we can say figure out how much to spend in r d to remain leaders, and also we can pay our investors a long-term, reliable dividend. That's like that's like so yeah, going on to the next slide, maintaining strong capacity to invest consistently in r d for the future. So, on the left side there they have total cash and net cash. The net cash is in the light blue. There um perfect sign.

They want to keep that cash position at 30 or more of annual net sales, and by doing that, they don't waste money, borrowing, money for r d and things like that, but also when the market is kind of going up and down it's kind of rocky, like what we've seen over the last couple of years, they can survive easily and Nokia typically has been quite conservative in uh. This approach, but they'll also be able to consistently and long term, is able to plow money back into r d um at the drop of a hat too if they need to, and they did also mention inorganic growth. A couple of slides back, which I wanted to touch on too inorganic growth, sometimes can be mergers and acquisitions. So if they see a small company that they're like whoa, that's super high-tech and that really complements the way we do things. Let's grab them.

You know and, like I always say on this channel, if you have cash on hand, you can buy stuff when it's on sale. Nokia has that same attitude, then, on the right side of the slide. They say: debt, maturities, bonds and loans um they keep that scale of 8 000 million 8 billion. I guess they keep that scale of 8 billion euros on the left side, so it lines up with the total cash and net cash on the left side. But basically you can see when the debt that they have is coming due over the coming years.

But they're saying like it's super, not a big deal, because we have so much cash on hand next slide our outlook for 2021 and 2023, so they have 2020 actual on there too. Net sales, probably gonna, be lower this year than last year, actually because we're resetting because we're re-figuring out how to be awesome going forward, but the 2023 outlook grow faster than the market star. That star says: assuming continuation of 2020 year-end euro USD rate of 123, because the euro USD rates probably going to be changing a lot. So they're saying assuming that rate doesn't get super bonkers out of whack we're going to be growing faster than the market. Comparable operating margin is also probably going to go down this year because we're resetting hold on guys big picture.

Let's think big picture 10 to 13 going forward free cash flow 1.4 billion euro last year. It's going to be positive. This year that could be a euro. That could be a lot more than that, it's hard to say, but 2023 and going forward clearly positive, comparable return on invested income last year, 11.9 this year, 10 to 15 and then after that, 15 to 20. , so 15 to 20 is really, really good um and would make them a clear leader in the industry.

I think, so they're saying guys hold on we're resetting keep a long-term approach to this, and things are going to be looking perfect in a little while, similarly, on the next slide at the bottom, they say comparable operating margin. Last year was nine point. Seven percent this year is going to be seven to ten, but after that going forward it's going to be 10 to 13. Earlier I mentioned how patents are a huge part of their business. That's it that falls under the Nokia technologies.

Business group check it out here on this slide. They show the 2021 numbers, and then they show 20 20, what they're expecting for 2023 and going forward so mobile networks, the biggest part of the company they're going to be increasing r d and making a complete turnaround. So this year, minus one to two percent, but in the future it'll be five to eight percent operating margin, network infrastructure, seven to ten percent this year, but it'll be going up nine to twelve percent, going forward into the future, and again they're saying down there at the very bottom: we're aiming to accelerate growth through focus on enterprise, digital transformation, cloud and industry, 4.0 next business group cloud and network services three to six percent this year, but it's going to be going up to eight to eleven percent by 2023 and then Nokia technologies, 75 operating margin. It's going to keep going! So that's all! I got for you guys today. What do you guys think? Are you excited about Nokia? Do you think they'll be able to pull it off um, I'm pretty comfortable, especially at this price? I feel like they're on sale, whether it's 350 or 4 or 450.

Like I said earlier, I think the company's probably worth the stock's probably worth 550 to 6 bucks right now, but if they're able to pull all this off slimming down their expenses and boosting uh customer loyalty and profit margin and all these different things that look really hopeful going forward, I think it's going to be pretty juicy in a couple of years, especially if that dividend comes back in looking forward to hearing your thoughts down in the comments section. Thank you guys very much for your time. Love you and have a great one.

Source : Tre McKee & the Benevolent Investors