From time to time investors will reach out to me via email to make a case for owning a stock I’ve just dissed, such as my mid-June take on Nokia Oyj (ADR) (NYSE:NOK). After suggesting it was pointless to own NOK stock when there are other tech stocks with similar dividend yields, I heard from an on-again, off-again shareholder.

Normally, I respond to these emails relatively quickly, but with a vacation then-pending on the horizon, a timely response fell through the cracks.

To make up for it, I will lay out the investor’s arguments in favor of NOK stock, followed by an assessment of whether they’ve been at all persuasive in changing my opinion that investors can do better elsewhere.

Special Dividend

The patent dispute settlement with Apple Inc. (NASDAQ:AAPL) in late May was a big win for Nokia because those sorts of battles can often take years to resolve. That NOK and AAPL buried the hatchet so quickly — the dispute began in December — is a sign that management in Finland just wants to keep rebuilding its business.

Apple will make an upfront cash payment followed by ongoing quarterly payments as part of its multi-year licensing agreement with Nokia. In addition, Nokia will get to sell its digital health products in Apple’s retail and online stores.

“There could emerge big future value from this as Apple could become an important distribution channel,” Handelsbanken analyst Daniel Djurberg told Reuters in May. “I have not given any value so far for Nokia’s digital health business, but might apply an option value to it.”

While the financial details of both the upfront payment and ongoing annual payments haven’t been released, the previous deal was worth $170 million annually; Helsinki, Finland-based OP Equities analyst Hannu Rauhala expects it could be as high as $570 million annually.

That’s not a lot for a company with annual revenues of $27 billion but it’s better than a kick in the head. Should Nokia management devote some or all of the additional licensing revenue to a special one-time or ongoing dividend, those owning NOK stock could see annual dividends jump by 50%.

That’s definitely good news for those long the shares.

Strong Competitor in Nokia 8

Nokia’s flagship smartphone could be released in September and by all accounts it’s expected to be a strong competitor in a very crowded field.

The investor who wrote to me estimated (based on Finnish media) that Nokia makes between $11 and $23 per smartphone in patent and licensing fees. If 100 million Nokia HMD and Nokia smart phones are sold in 2018, that would mean $1.7 billion in licensing revenue, much of it pure profit.

“Should those materialize, that would be a significant boost to profits,” wrote my Nokia supporter in their letter to me. “Q1 results mentioned brand licensing income as one of the reasons for a 25% increase in Nokia Tech sales. That’s quite good concerning Apple paid them nothing in Q1 and Nokia had just one handset for sale in one market [China].” Hmm…

Nokia releases second quarter results on July 27. We should know more about its various smartphones set to hit the stores and the contribution these products are expected to have on overall profitably.

Bottom Line on NOK Stock

While it’s hard to know how successful HMD will be at reviving the Nokia brand name in smartphones and tablets, the potential boost to profits does seem to provide a floor price for NOK stock.

“I believe the collision between fantasy and reality is causing the present consolidation in NOK stock,” wrote InvestorPlace.com’s Josh Enomoto July 6. “Shares haven’t moved at all over the trailing month, which is a dramatic departure from its volatile trading. Perhaps this is just further negotiation between the bulls and bears before a new leg up. Or, the Nokia story may have run out of gas.”

To move higher than $6, Enomoto believes Nokia needs to bring something substantial to the party. Certainly, almost $2 billion in licensing revenue qualifies.

Given the tech correction that’s going on at the moment, I still believe there are better tech stocks available. However, if you don’t mind a lot of volatility and can afford to lose 100% of your investment, a speculative bet on NOK stock wouldn’t be the worst move in the world.

Just don’t be disappointed if Nokia turns out to be all talk and no action.

As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.