A Swedish Leader in Tactical Communication
A Hidden Gem in Defense with Explosive Dividend Growth
Our new Focus Stock from Sweden is a little-known Defense and Public Safety play that is perfectly positioned to benefit from the surging defense spending in Europe.
Of course, we are primarily looking at the dividend of this stock, which, with a market value of less than $2 billion, is still a relatively small player.
In recent weeks, the stock price has soared, in line with other defense companies in Europe. Valuation is high, but so are the growth figures—and that certainly applies to the dividend, which is set to nearly double this year. There’s even more growth ahead in the coming years!
This company’s revenue surged by nearly 46% in 2024, reaching a record SEK 1.8 billion. In 2023, growth was even higher at 59.7%.
Our new focus stock is hiking its dividend by nearly 77% this year to SEK 2.30 per share, following an 86% increase in 2024—an exceptional rate of growth
The stock we’re talking about is INVISIO AB. It had already been on our watchlist as a Focus Stock, but due to the strong price surge in recent weeks, we’ve moved it forward. We want to keep you updated on new opportunities!
What Does INVISIO Do?
INVISIO AB is a Swedish company specializing in advanced communication and hearing protection systems for high-noise and mission-critical environments. Their primary customers include defense forces, law enforcement, and security personnel. The company’s product lineup includes:
Headsets with integrated hearing protection
Control units for seamless communication
Intercom systems designed for vehicle and mobile operations
These solutions enhance communication clarity while protecting users’ hearing in extreme noise environments, making INVISIO a crucial supplier for modern tactical operations.
A Brief History
Founded in 1999, INVISIO initially explored both the consumer and professional markets before shifting its focus entirely to tactical communications in 2008.
A major milestone was the acquisition of Racal Acoustics in 2020, a leading provider of communication systems for constant high-noise environments. This move strengthened INVISIO’s product portfolio and market position, particularly in military applications.
Key Competitors
INVISIO operates in a highly specialized and competitive market. While exact competitors depend on the segment, some of the major players include:
3M Peltor – Known for industrial and tactical hearing protection
Silynx Communications – Provides in-ear tactical headsets
CeoTronics – Specializes in professional-grade communication systems
OTTO Engineering – Focuses on tactical audio solutions
Despite strong competition, INVISIO has maintained its market leadership through innovation and superior product integration.
Growth Opportunities: Rising Defense Budgets
Global defense spending is on the rise, creating significant growth opportunities for INVISIO. Key factors driving demand include:
Increased military modernization programs
Rising investment in special forces equipment
Expansion of law enforcement and homeland security budgets
In 2024, INVISIO partnered with the U.S. Defense Innovation Unit to develop wireless tactical communication solutions, leading to their new INVISIO Link product and an initial test order of USD 3.5 million. Additionally, a major European customer placed a significant order for their intercom system, reinforcing the company’s momentum in the market.
Does INVISIO Have a Moat?
Yes, INVISIO benefits from several key competitive advantages:
Deep Expertise in Acoustics & Human Hearing – Decades of research into how hearing functions in high-noise environments.
Proprietary Software & Material Technology – Their solutions offer superior integration and ease of use.
Strong Customer Relationships – INVISIO is an established, trusted supplier for defense and security organizations worldwide.
Plug-and-Play Functionality – Unlike many competitors, their products require minimal setup and integrate effortlessly with existing systems.
Strategic Acquisitions – The Racal Acoustics acquisition broadened their portfolio, making them even more competitive in military applications.
Surging revenues AND stock price
INVISIO’s revenue surged by nearly 46% in 2024, reaching a record SEK 1.8 billion. In 2023, growth was even higher at 59.7%, and in previous years, revenues also increased by double digits. For 2025, analysts are more conservative, forecasting 13% revenue growth, but given Europe’s strong increase in defense investments, we believe INVISIO will benefit significantly above market expectations.
The stock price has already reacted, but there’s more upside potential. The stock remains a strong buy on dips, already delivering 50% gains in 2025.
Explosive Earnings and Dividend Growth
Earnings per share (EPS) jumped 71% in 2024 to SEK 6.69. Analysts expect another 23% increase in 2025 to SEK 8.24, with at least 20% annual EPS growth projected in the coming years.
A major advantage is INVISIO’s debt-free balance sheet, with SEK 205 million in net cash at the end of 2024. This amount is expected to increase further, driven by strong free cash flow.
It’s no surprise that INVISIO is hiking its dividend by nearly 77% this year to SEK 2.30 per share, following an 86% increase in 2024—an exceptional rate of growth. At SEK 415 per share, the dividend yield is 0.6%—low, but mainly due to the surging stock price. More importantly, the dividend is growing at double-digit rates annually, and we believe it could easily double again within the next 2-3 years.
Valuation and Strong Fundamentals
After the 2025 rally, valuation is elevated but not extreme. At a P/E of 49 for 2025, INVISIO is expensive, but justifiably so, compared to many other stocks with similar growth.
Rapid growth & relatively small size leave room for further expansion
ROIC above 40%—a highly impressive return on invested capital
EBIT margin consistently above 20%, with potential to exceed 25% in coming years
These strong fundamentals make INVISIO an attractive long-term play, particularly on price dips.
Geopolitical Tailwinds Drive Demand
The 50% stock price surge this year is largely due to increased European defense spending amid heightened geopolitical threats, particularly from Russia. While we would have liked to highlight this stock earlier, recent global events have accelerated its growth potential.
Regardless, INVISIO is a hidden gem that we’ll be keeping a close eye on!
Disclaimer: The information provided here is for informational purposes only and should not be considered financial advice. Investors should conduct their own research or consult with a financial advisor before making any investment decisions.