7 Nordic Stocks Every Global Investor Should Own

· Kone KNEBV

· Coloplast COLO B

· Saab SAAB B

· Kongsberg Gruppen KOG

· Novo Nordisk NOVO B

· Novonesis NSIS B

Over the past decade, investors in the Swedish, Danish and Norwegian markets have seen significantly higher returns compared to those invested in a broader European index.

The Morningstar Developed Markets Europe Index has gained 101.5% over the past decade, significantly trailing the Morningstar Denmark Index, which saw an impressive 216.5% return during the same period. Finland stands as an exception, with its market struggling since 2023, leading the Morningstar Finland Index to finish the same ten-year period with a 72.9% gain. Note that all data in this is article is shown in base currencies and that the movement of exchange rates can either benefit or hurt UK investors who hold foreign stocks.

Denmark, Sweden and Norway Have Outperformed the European Market

IKEA, Lego and Spotify Are Driving Global Investment Opportunities

While many investors have benefited from exposure to US technology stocks in recent years, Nordic stocks have provided valuable diversification, as the four largest Nordic countries are home to several world-leading corporate giants.

For instance, The Economist highlights the region’s impressive ability to foster some of the world’s largest companies. It points to Swedish IKEA, the largest furniture maker globally, and Danish Lego, the world’s top toymaker by revenue. Although Spotify, the world’s largest streaming music company, was introduced to Wall Street with a Swiss flag at its 2018 IPO, it was actually founded in Sweden and remains headquartered in Stockholm. Another Swedish company, Klarna, a major player in the buy-now-pay-later sector, filed for an IPO with the US Securities and Exchange Commission in November 2023, planning to go public in 2025. Klarna’s IPO would mark the largest Swedish company to list in the US since Spotify’s debut in 2018.

Novo Nordisk and Top Nordic Stocks Offer Long-Term Value

Perhaps one of the best known, publicly-traded Nordic companies today is Danish drug maker Novo Nordisk NOVO B, known for its blockbuster drugs Ozempic and Wegovy. Before its sharp market fall at the end of 2024, the market capitalization of Novo Nordisk exceeded the gross domestic product of Denmark. It remains the biggest stock in Europe with a market cap of DKK2.5 trillion ($353 billion), ahead of names like Lvmh Moet Hennessy Louis Vuitton MC, SAP SAP and ASML ASML.

While Wall Street has attracted some of the biggest Nordic IPOs in recent years, several world-leading companies may still be overlooked by US-centric investors. Below are seven Nordic stocks currently trading near or below their estimated fair value, all of which have earned a wide Morningstar Economic Moat Rating, indicating they are likely to maintain their competitive edge for at least the next 20 years. However, the best companies are not always the best stocks to buy. The price you pay to own a company is equally important. Stocks with a star rating of 4 or 5 represent a good buying opportunity, while investors may want to wait for a price pullback in stocks like Kongsberg Gruppen, Novo Nordisk, and Novozymes before making a purchase.

Here’s a closer look at the wide-moat Nordic stocks. All data is as of Jan. 22, 2025.

Elekta

· Fair Value Estimate: SEK 127.00

· Morningstar Uncertainty Rating: Medium

· Discount to Fair Value: 49%

· Forward Dividend Yield: 3.7%

· Morningstar Rating: ★★★★★

Sweden-based Elekta develops, manufactures, and distributes treatment planning systems for neurosurgery and radiotherapy, including stereotactic radiosurgery and brachytherapy. The company has an installed base of more than 7,000 linear accelerators, Gamma Knife and Unity platforms, as well as brachytherapy installations. The company’s sales are evenly distributed across geographies, with North and South America accounting for 31%; Europe, the Middle East, and Africa accounting for 35%; and the Asia-Pacific contributing the remainder.

“The market for radiotherapy equipment is characterized by very high barriers to entry owing to significant intellectual property and technological know-how and high switching costs that arise from significant training costs and disruption risk. What started a few decades ago as a rather fragmented field has now evolved into essentially a duopoly; with virtually no new entrants for more than a decade, the main two players (Varian was acquired by Healthineers) have built durable franchises and wide economic moats around their businesses.

Healthineers is the largest RT manufacturer, with more than 50% market share globally and an even more dominant position in the U.S., controlling more than 70% of all installations. Elekta is the second-largest player, with roughly one third of the world’s RT installations.”

Analyst: Alex Morozov, CFA

Kone

· Fair Value Estimate: EUR 50.00

· Morningstar Uncertainty Rating: Low

· Discount to Fair Value: 5%

· Forward Dividend Yield: 3.68%

· Morningstar Rating: ★★★★

Kone is a global top-four supplier of elevators and escalators. Kone began producing elevators in Finland in 1918 and today generates revenue in three ways: selling new elevators and escalators, modernizing old equipment, and servicing its installed base. Most of the company’s profit comes from the last activity, where contracts are rolled over annually with built-in price increases. The bulk of Kone’s business is in elevators, which are more numerous globally than escalators. Its business model is similar to its closest competitors Otis, Schindler, and TK Elevator.

“Kone’s high returns on invested capital result from the confluence of its durable competitive advantages — which include reputational intangible assets, customer switching costs, and its cost advantage in the provision of elevator servicing — and its capital-light business model.”

Analyst: Grant Slade, CFA

Coloplast

· Fair Value Estimate: DKK 962.00

· Morningstar Uncertainty Rating: Medium

· Discount to Fair Value: 15%

· Forward Dividend Yield: 2.69%

· Morningstar Rating: ★★★★

Coloplast is a leading global competitor in ostomy management and continence care. The firm designs, manufactures, and markets ostomy care systems, disposable containment devices, paste, powder, seals, and intermittent catheters for continence care. Coloplast also maintains a tertiary presence in the urology and woundcare markets, where it manufactures and markets penile implants, slings for incontinence and prolapse, and wound dressings. The company derives more than 60% of sales from Europe, 24% from other developed countries, and 17% from the rest of the world.

“Having studied Coloplast for over a decade now, we think it can maintain its competitive advantages and generate economic profits over the 20-year period that characterizes a wide economic moat.Coloplast’s moat primarily stems from its ostomy, continence care, and urology businesses, where it has been able to leverage intangible assets and, at times, switching costs. The firm has a long record of meaningful innovation in the first two areas. We like the moatiness of the ostomy and urology businesses. The 2 billion USD global ostomy market benefits from intangible assets and switching costs and is the kind of stable oligopoly we like to see.”

Analyst: Debbie S. Wang

Saab

· Fair Value Estimate: SEK 262.50

· Morningstar Uncertainty Rating: Medium

· Discount to Fair Value: 13%

· Forward Dividend Yield: 0.7%

· Morningstar Rating: ★★★★

Saab supplies products and services for military, defense and civil security. The company operates in four segments: aeronautics, dynamics, surveillance, and Kockums. Aeronautics involves the manufacturing and support of defense and commercial aerial systems. Dynamics produces combat weapons and defense training and management systems. Surveillance supplies security services, and creates traffic management technology and aviation parts. Kockums offers solutions for naval missions. Over three fourths of Saab’s sales are from the defense sector. The company sells to multiple geographic regions, but over half of its sales come from Europe.

“As Sweden’s largest defense contractor, Saab is poised to benefit from the nation’s commitment to spend approximately 300 billion SEK on defense between 2023 and 2025, with 60% of the budget in areas strongly aligned with Saab’s portfolio. Additionally, Sweden recently joined NATO, which opens new avenues for Saab to enhance its role in the defense of the Nordic and Baltic Sea regions.

Increasing tensions globally, particularly between the West and China and Russia, are leading to greater defense spending in Europe and the Asia-Pacific region. Prompted by the Russia-Ukraine war, almost all European countries will increase their defense budgets to at least 2% of gross domestic product in the coming years. This presents long-term opportunities for Saab to leverage its geographical footprint and product range.”

Analyst: Loredana Muharremi, CFA

Kongsberg Gruppen

· Fair Value Estimate: NOK 1230.00

· Morningstar Uncertainty Rating: Medium

· Premium to Fair Value: 5%

· Forward Dividend Yield: 0.54%

· Morningstar Rating: ★★★

Kongsberg Gruppen is an international technology company that supplies products and services to the defense, maritime, oil, gas, and aerospace industries. The company is divided into two business segments: the maritime segment and defense and aerospace systems. Maritime, which earns most of the firm’s revenue, creates navigation, automation, monitoring, and positioning products for commercial ships and offshore industries. The defense and aerospace segment provides defense and space-related products and systems. Outside of the two main segments, the firm operates Kongsberg Digital, which produces digital solutions for oil, gas, wind, and merchant marine markets. Products are delivered globally, with North America accounting for about one third of total revenue.

“Stable defense revenue offsets in part civil business revenue cyclicality. Moreover, Kongsberg has created a comprehensive portfolio of products and services, deliberately avoiding an overreliance on any single program. The company serves 39 countries, with 20% of the revenue generated in Norway, 28% in the rest of Europe, 26% in North America, and the remaining from the rest of the world.

Given the sector characteristics, we believe that the defense & aerospace division warrants a wide moat, while we view maritime, digital, and discovery as narrow-moat segments.”

Analyst: Loredana Muharremi, CFA

Novo Nordisk

· Fair Value Estimate: DKK 600.00

· Morningstar Uncertainty Rating: High

· Discount to Fair Value: 4%

· Forward Dividend Yield: 1.73%

· Morningstar Rating: ★★★

With roughly one third of the global branded diabetes treatment market, Novo Nordisk is the leading provider of diabetes-care products in the world. Based in Denmark, the company manufactures and markets a variety of human and modern insulins, injectable diabetes treatments such as GLP-1 therapy, oral antidiabetic agents, and obesity treatments. Novo also has a biopharmaceutical segment, constituting roughly 10% of revenue, that specializes in protein therapies for hemophilia and other disorders.

“Novo Nordisk’s strong intangible assets in diabetes and related cardiometabolic diseases like obesity give the firm a wide economic moat that will shield profitability for the long run. A focused research and development strategy allows the firm to repeatedly extend patent protection through innovation. Efficient manufacturing techniques and economies of scale have allowed Novo’s insulin business to provide strong global profitability, qualities that it shares with the only two other global insulin players, Sanofi and Eli Lilly.”

Analyst: Karen Andersen, CFA

Novonesis

· Fair Value Estimate: DKK 390.00

· Morningstar Uncertainty Rating: Medium

· Premium to Fair Value: 5%

· Forward Dividend Yield: 2.0%

· Morningstar Rating: ★★★

Novonesis was formed in 2024 through the merger of Novozymes and Chr. Hansen. Following the merger, the company became the world leader in industrial enzymes and microbial solutions, with a nearly 50% market share in both. The firm supplies a wide range of industry groups: household care, food and beverages, bioenergy, agriculture and feed, technical and pharmaceuticals. Its biological solutions create value for its customers by improving yield efficiency and performance, while saving energy and generating less waste. The company is headquartered in Denmark, employs around 10,000 people, and works across more than 30 research and development and application centers and 23 manufacturing sites.

“Novonesis has a dominant position across both the enzymes and cultures markets, with a market share of around 50% in each. Competition is relatively benign across both industries due to their largely duopolistic nature. IFF is the second largest player in these markets, with a market share of around 20% in each, followed by wide-moat DSM-Firmenich with a market share of around 5%-6%, largely confined to the food and beverage segments.”

Analyst: Diana Radu, CFA

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.