In brief:
- Stock analysts say these European stocks have upside potential, based on their one-year price target.
- The Euro Stoxx 50 index is a select group of companies designed by STOXX. Its goal is “to provide a blue-chip representation of Supersector leaders in the Eurozone”
- This list could help active dividend growth investors to identify potential bargains for 2021.
The screener results below list the top 10 Euro Stoxx 50 stocks including their last price, the one-year average price target estimated by analysts, and the potential (%) based on the difference between the last price and the analysts’ price target.
The following European stocks are the best ones to consider based on their one-year price target according to analysts:
In general, analysts favor European stocks according to Bloomberg as shown in the chart below.
Let’s have a closer look at the top-3 companies
Bayer AG is a German multinational pharmaceutical and life sciences company and one of the largest pharmaceutical companies in the world and around 43 billion EUR revenues (2019). Bayern is transforming its pharmaceutical business, to a leading position in the field of cell and gene therapy. Recently they announced a cooperation agreement with the biotech company Curevac for the development and delivery of its corona vaccine candidates. The analysts are quite optimistic about a strong recovery to even the price levels of 5 years ago.
The Spanish banking group Banco Santander S.A. attracts deposits and offers retail, commercial, and private banking, and asset management services. In April, following the ECB’s initial recommendation that European banks should refrain from paying dividends against 2019 and 2020 results, Santander decided to cancel the payment of the 2019 final dividend and suspend the dividend policy for 2020. Furthermore, the board also asked shareholders to approve a cash payment of EUR 0.10 per share in October 2020, to be paid in 2021, subject to the European Central Bank (ECB) guidance and approval.
Eni SpA explores for and produces hydrocarbons in Italy, Africa, the North Sea, the Gulf of Mexico, Kazakhstan, and Australia. The Italian company both produces natural gas and imports it for sale in Italy and elsewhere in Europe. Analysts are surprisingly optimistic about Eni. The stock price declined by more than 30% and the dividend was slashed by more than 70%. Given the heavy debt load (Eni’s debt-to-equity ratio is above 0.75 times), this is not over favorite dividend stock nor sector to invest in.
Other Sources of Dividend Investment Ideas
There are several lists to quickly screen for businesses that regularly pay rising dividends.
- The Dividend Aristocrats Index is based on 64 companies part of the S&P 500 and with 25+ years of consecutive dividend increases.
- The Dividend Kings List is even more exclusive than the Dividend Aristocrats. It is comprised of less than 20 businesses with 50+ years of consecutive dividend increases.
- The MoneyInvestExpert Defensive Aristocrats is a performance-based top-10 selection of the Dividend Aristocrats to outperform the market in the long-term.
- Portfolio lists like the Berkshire Hathaway Portfolio or Bill Gates’stock portfolio can be a source.
- For the European focused investors, there is also the list of European Dividend Aristocrats.
- Dividend Champions are not necessarily members of the S&P 500 index, have increased their dividend for 25 or more consecutive years.
- 100+ years of dividend, the list of stocks that pay over 100 years of dividend can be a list of inspiration.
- Blue Chips stocks from the US or the European ones.
Next to selecting the right dividend stocks, important principles for successful long-term investing are Disciple, Diversification, Defensive & indeed Dividend. Read more about this in our free e-book.
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