European equities have performed well so far this year with most of the major benchmark indices up by double digit percentages similar to the S&P 500. Despite the run up European stocks have more room to grow as most of the economies recover and years of sovereign debt crisis issues are well behind us and not ahead of us. As I have noted in previous articles, European stocks have plenty of room to catch with their American peers. So it is not too late to invest in European companies. Market experts at Charles Schwab emphasized this point in a recent article.
Despite problems, we believe there is an investment case for Europe. Many of Europe’s companies are global, reporting sales in both euros and local currencies. Many of these companies have strong competitive positions in the luxury, technology and industrials industries.
European stocks have room to catch up
Depressed profit margins also contribute to our positive outlook on European stocks. While profit margins in the United States have risen to a 45-year high, margins in the eurozone have declined since the beginning of 2008. If a modest economic recovery continues as we expect, we believe profits could post even higher growth, and help narrow the performance gap between US stocks and European stocks.
Source: Schwab Market Perspective: The Way Things Are…, Charles Schwab
Ten European companies are listed below for further research:
1.Company: Siemens AG (SI)
Current Dividend Yield: 2.31%
Sector: Industrial Conglomerates
Country: Germany
2.Company:D iageo PLC (DEO)
Current Dividend Yield: 2.36%
Sector:Beverages
Country: UK
3.Company:Technip (TKPPY)
Current Dividend Yield: 1.49%
Sector:Energy Equipment & Services
Country: France
4.Company: Aegon NV (AEG)
Current Dividend Yield: 3.11%
Sector: Insurance
Country: The Netherlands
5.Company: Edp Energias De Portugal SA (EDPFY)
Current Dividend Yield: 4.22%
Sector: Electric Utilities
Country: Portugal
6.Company:Air Liquide (AIQUY)
Current Dividend Yield: 2.40%
Sector: Chemicals
Country: France
7.Company: Lafarge SA (LFRGY)
Current Dividend Yield: 1.86%
Sector:Construction Materials
Country: France
8.Company: Danone SA (DANOY)
Current Dividend Yield: 2.57%
Sector:Food Products
Country: France
9.Company: Eni SpA (E)
Current Dividend : 5.83%
Sector:Oil, Gas & Consumable Fuels
Country: Italy
10.Company: National Grid PLC (NGG)
Current Dividend Yield: 5.03%
Sector: Multi-Utilities
Country: UK
Note: Dividend yields noted are as of Nov 4, 2013. Data is known to be accurate from sources used.Please use your own due diligence before making any investment decisions.
Disclosure: Long TKPPY
