The political uncertainty and financial turmoil during the coronavirus pandemic have become a challenge for the European stocks to sustain their increased value. Although it has been a tough year, you make the European stocks make a comeback post-2020. The process may be slow, but European traders are certain that European stocks are ready to regain their top spot.
Even when the capitalist order had to endure the wrath of coronavirus, some of the best European stocks are still behemoths and generate high profits. Over the last few months, the European stock market has been in the process of getting its image and charm back.
Comparatively, European equities are far well-positioned than the U.S. In fact, it serves as a first step towards the path of recovery from the coronavirus downturn. Financial experts predict that several European stocks will continue to grow in the upcoming years.
Here’s an overview of the most profitable European stocks you can evaluate and invest this year:
Why Invest in European Stocks?
For starters, focus on the five benchmarks that calculate most of the EU’s gross domestic product. And that involves the French CAC 40, German DAX 30, Italian FTSE MIB 40, Spanish IBEX 35, and British FTSE 100. However, Germany and France (i.e., the CAC and DAX) have the most influence in Europe and serve as representatives of the European economy.
Predominantly, most investors depend on modern European indexes of FTSE and MSCI to check performance and return benchmarks. Besides, the European market has always been a home to some of the world’s most renowned companies in consumer goods, healthcare, and energy sector.
By investing in European stocks, you can avail various blue-chip stocks that would further diversify and add value to your portfolio. Contrary to misguided judgment, home-country does not always garner profitable returns. Therefore, don’t reserve blind judgment for any European stock.
If you want to broaden your stock investment options, you can use an interactive stock market screener to buy stocks from a specific industry. You can simultaneously check the total earnings, price point, and market capitalization of your preferred European stock. Think of it as a preliminary checklist of stocks to conduct more research and make informed investment decisions.
The Best European Stocks You Can Invest and Evaluate in 2020 and Beyond
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EDEN Stocks
The annual dividend yield of Eden stocks is 0.56%, whereas the trailing return stands at 39%. EDEN is the first of its kind in Danish stocks. It comes with a large-cap growth and heavily focuses on the healthcare sector. Furthermore, EDEN’s top holdings amount to two-thirds of its assets. The top EDEN holders are Novo Nordisk (NVO), the pharmaceutical firm; DSV Panalpina (DSV), the logistics and transport company; and Ørsted (ORSTED), the energy firm.
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FGM Stocks
FGM is a famous multi-cap mixed fund that uses the methodology of quantitative AlphaDEX to choose the best Germans stocks. The annual dividend yield of FGM is 1.04%, while its total trailing return stands at 20.5%.
Your priority should be to avail 40 stocks for your portfolio depending on factors such as sales-to-price ratio, single-year sales performance, and current price appreciation. The top FGM holding includes Zalando SE, an online apparel firm; United Internet AG; the online services provider; and Hypoport SE, the tech-based financial services provider.
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EWD Stocks
The annual dividend yield of EWD is 1.43%, whereas the total trailing return is 28%. EWD is another large cap combined targeted stocks of Sweden’s National Stock Exchange. These combined stock funds track the performance through the MSCI Sweden Index, which includes more than 35 large and mid-cap stocks.
Some of EWD’s top holdings are Atlas Copco AB, the manufacturing company; Investor AB, the holding company; and Telefonaktiebolaget LM Ericsson, the telecommunications and networking firm.
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UniCredit Stock
UniCredit stock is a viable long-term stock investment. It is traded and publicly listed on three different stock exchanges; the Frankfurt Stock Exchange, Warsaw Stock Exchange, and the Italian Stock Exchange. In fact, it is an integral component of the famous FTSE MIB and EURO STOXX 50 stock market indices.
The current growth rate of the company is higher than expected in the Italian Market and stands at an annual growth of 13.4% in the coming years. Many investors see UniCredit stock as an opportunity to evaluate long-term stock options. However, you may need some assistance from a regulated and licensed investment firm to secure your stock options.
Make Strategic Stock Investments
Since the start of the COVID-19 pandemic, it has not been easy for investors to make long-term profits from stocks. However, the last quarter of 2020 shows a promising outlook for the future. Despite the EU’s impact due to the outbreak, your strategic move would help you diversify European stocks and lower the risk.
Fortunately, the European stock market is not as volatile as the U.S. Your best course of action would be to stick with technology and defensive stocks. Remember, European stocks have a higher negative correlation with a decreasing U.S. dollar. It means if most elementary stock factors hold up in the European market, a falling USD would benefit European stocks.
In fact, there is a good chance that the U.S. dollar will continue to depreciate for the remainder of 2020. According to the S&P 500 data, the U.S. dollar’s 10-year correlation stands at -0.41 compared to the -0.64 MSCI Europe Index, which will hold up in the foreseeable future.
Conclusion
Before you opt for a European stock, review the company, previous earning potential, historical ROI, and evaluate current assets that should be able to cover any liabilities. Major European economies such as France and Germany have subsidies that propel labor hoarding and decrease the probability of a high unemployment rate in a crisis.
The trick is to make European stock investments in industries and companies that you understand. Your goal should be to look for stocks that you can evaluate for an extended period. Therefore, always look for any European stock’s future potential rather than base your investment decision on its past performance.
Interesting related article: “What is an investment?”