Things are looking rosier in Europe… Here's how you can make the most of it

by , 19 October 2015

The climate in Europe certainly looks like it is improving. Between April and June, sales from 75% of European companies beat analyst forecasts.

And profits also did well, with 75% of companies matching or beating analyst forecasts.

So what could lie ahead for European companies? And what's worth looking at?

Let's take a closer look…

European companies are on the up

With results for European companies improving this year so far, it looks like there’s scope for further improvement.

As Alexander Fitzalan Howard, a portfolio manager with JPMorgan European Investment Trust, tells Money Week, prices could rise from here without looking expensive. And there is scope for earnings and dividends to grow.

The result of the financial crisis is more solid banks in Europe that have improved their profitability and cash flows. Dividends are due to return.

With the chance of interest rates rising into the future in Europe, this should be good news for financial stocks. This should knock on to insurance, real estate and diversified financial too.

These sectors are all well placed to benefit from the current quantitative easing.

Three European companies to consider

If you want to place yourself to benefit from a rise in European companies, here are three to consider, Fitzalan Howard explains…

Munich Re [DAX:MUV2]
This is an insurance company which is beating expectations. As rates rise, the company should benefit and grow its profitability.

Proximus [Brussles:PROX]
This is the largest telecoms company in Belgium. Thanks to lower interest rates, this company’s managed to reduce its debt levels and refinance. It offers a dividend yield of 4.3%.

B Post [Brussels:BPOST]
This mail company has benefitted from lower oil prices. Despite a fall in letter mail volumes, a rise in online parcel deliveries stands this company in good stead for the future.

So there you have it. Here’s how you can make the most of the rosier outlook in Europe.

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Things are looking rosier in Europe… Here's how you can make the most of it
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