Europe: leaders of sustainable growth

Europe: leaders of sustainable growth


Today we will touch European companies with the highest profit growth rate, whose capitalization is over €280M and price-earnings ratio (P/E) is not higher than 30. Such P/E means that the stocks are not overpriced, and they can be invested in without the fear of a bubble burst.

Today’s overview features companies with exceptionally high profit growth rates, from 181% to 356%. What is also remarkable about this overview is that it is quite international: the 7 companies listed here come from 6 countries, and only the United Kingdom is represented twice.

The quotes are given in the traded currency, all other data here are converted into euro. Please take into account that the percentages showing the price changes throughout several years in different currencies may differ a lot. Letter M means millions, B stands for billions.

1. Eik fasteignafelag

Landsbankinn bank building  

— Ticker: EIK

— Stock Exchange: NASDAQ OMX Iceland

— Country: Iceland

— Currency: Iceland krone

— Capitalization: €344M

— Annual turnover: €57M

— P/E: 11

— Annual dividends: 2,3%

— Yearly price change: +61%

— 5-year profit change: +356%

— 5-year turnover change: +83%

About the company. Real estate company that is specialized in industrial and commercial buildings. It rents them out and leases, as well as reconstructs and provides services to the premises. The company owns about 500 buildings: among them there are warehouses, shopping capacities, offices, restaurants and hotels. They are primarily located in Reykjavik.

In the chart. Since 2015, Eik stock prices have been growing. They have doubled during the last two years. The dividends are paid once a year.

Advantages for investors. Record-breaking profits growth, significant growth of the turnover and quotes.

Disadvantages for investors. No significant disadvantages have been found.

2. Scottish Investment Trust

Scottish Investment Trust was constantly paying dividends, even during the recession

— Ticker: SCIN (available in EXANTE trading platform)

— Stock Exchange: London Stock Exchange

— Country: the United Kingdom

— Currency: UK pounds

— Capitalization: €768M

— Annual turnover: €245M

— P/E: 4,1

— Annual dividends: 2,8%

— Yearly price change: +21%

— 5-year profit change: +308%

— 5-year turnover change: +70%

About the company. The company invests in the production sector. It also works in energy production, retail, healthcare, finance, information technology and other spheres. The trust operates in a number of countries, from Asia to Latin America.

In the chart. Scottish Investment Trust is listed on the stock exchange for a long time, and has seen both ups and downs. Since 2003, however, the general trend has been positive even taking into account the local downfall in 2008-2010 (and it was rather humble in the world’s scale.) Today the trust’s quotes are at their historic high, about 800 pounds. The dividends are paid stably, twice a year, and this tradition has never been abandoned — even during the worst periods of the company’s operation.

Advantages for investors. Significant 5-year profits growth, low P/E, the turnover growth is also quite promising. The long-time positive quotes trend and stable dividend payments add up to the other advantages.

Disadvantages for investors. No significant disadvantages have been found.

3. Fingerprint Cards

Fingerprint Cards produces sensors for fingerprint identification

— Ticker: FING-B

— Stock Exchange: NASDAQ OMX Stockholm

— Country: Sweden

— Currency: Swedish krona

— Capitalization: €1,2B

— Annual turnover: €695M

— P/E: 5,6

— Annual dividends: —

— Yearly price change: —62%

— 5-year profit change: +237%

— 5-year turnover change: +134%

About the company. The company produces fingerprint sensors used to identify people in different cases, like opening doors or confirming operations instead of password entering. Such devices have long been anticipated by futurologists, but it’s today that they are actively embodied into life. Although Fingerprint Cards has existed for a long time already, it revealed its break-through technologies only in 2011, and became famous only in 2015. The growing popularity led to a spring of quotes, which was followed by a fall, as it usually happens.

In the chart. Until 2012 Fingerprint Cards fluctuated from 2 to 50 krones. In 2013, they passed the milestone of 80 krones, which was followed by astonishing 675 krones in 2015. This peak turned out to be a bubble, however: the stock prices rolled back to 35 krones, which was even lower than the quotes of 2006, when the company was not even half as famous as in 2015.

Advantages for investors. Remarkable profit growth during the last five years, low P/E, quotes at their long-time minimums, strong demand for the company’s produce. All things considered, the company must be underpriced at the moment, and the stock price growth is very likely.

Disadvantages for investors. Continuous negative price dynamics, no dividends.

4. Ashtead Group

Digger machine leased by Ashtead Group

— Ticker: AHT (available in EXANTE trading platform)

— Stock Exchange: London Stock Exchange (LSE)

— Country: the United Kingdom

— Currency: UK pound

— Capitalization: €9,5B

— Annual turnover: €2,9B

— P/E: 17

— Annual dividends: 1,5%

— Yearly price change: +76%

— 5-year profit change: +228%

— 5-year turnover change: +17%

About the company. A lease provider of specialized industrial equipment. It supplies customers with construction equipment, generators, heating and ventilation equipment for industrial use, and so on, for temporary use, as well as provides a full range of services for all this equipment.

In the chart. The major part of the 2000s (excluding the unfortunate 2003) the price of Ashtead’s stocks fluctuated between 100 and 200 pounds. In 2012, however, they started growing rapidly, and as a result, they rose 8 times during the last five years. Ashtead Group pays dividends twice a year, and they do it regularly since 2006.

Advantages for investors. Significant profit growth within the last five years, drastic annual quotes growth.

Disadvantages for investors. Low dividends.

5. Bobst Group

Bobst Group shop floor

— Ticker: BOBNN (available in EXANTE trading platform)

— Stock Exchange: SIX Swiss Exchange

— Country: Switzerland

— Currency: Swiss franc

— Capitalization: €1,4B

— Annual turnover: €1,4B

— P/E: 18

— Annual dividends: 1,8%

— Yearly price change: +68%

— 5-year profit change: +213%

— 5-year turnover change: +15%

About the company. The company produces packaging and provides equipment and services for that, covering a wide spectrum of goods. It is an established enterprise: it was founded in 1890 to work with typographies in Lausanne. Until the 1930s it operated only in Switzerland, but then expanded its services to France. During the 1960s, they opened offices in the US, Japan and some other countries. Today, it owns plants in 8 countries, including Russia.

In the chart. After the crisis of 2008, the price of Bobst’s stocks decreased for a while, and even in 2015 it was just a little bit higher than in 2009. In 2016, however, it started to grow quickly and crashed the record of 2008. The company pays dividends once a year, but not very stably: there were no dividends in 2009–2013, for example.

Advantages for investors. Impressive 5-year profit growth, significant stock price growth.

Disadvantages for investors. Low and unstable dividends.

6. Global Dominion Access

Global Dominion Access developing and constructing industrial facilities

— Ticker: DOM (available in EXANTE trading platform)

— Stock Exchange: Bolsa de Madrid

— Country: Spain

— Currency: euro

— Capitalization: €623M

— Annual turnover: €613M

— P/E: 26

— Annual dividends: —

— Yearly price change: —

— 5-year profit change: +186%

— 5-year turnover change: +37%

About the company. Development company that operates in telecommunications, energy production, and other industrial directions. It constructs new buildings and provides service and maintenance to the existing ones. GDA works in many countries of Europe, Asia, as well as in North and South Americas.

In the chart. The information about stock prices is available for less than a year. They grew throughout the period, and the overall rise constitutes about 30%.

Advantages for investors. Significant growth of the profit and turnover.

Disadvantages for investors. The Company has been listed on an exchange for only a short time. It does not pay dividends and features the highest P/E among the companies of this overview.

7. CeGeReal

Europlaza office complex by CeGeReal

— Ticker: CGR (available in EXANTE trading platform)

— Stock Exchange: Euronext Paris

— Country: France

— Currency: euro

— Capitalization: €495M

— Annual turnover: €61M

— P/E: 12

— Annual dividends: 5,4%

— Yearly price change: +16%

— 5-year profit change: +181%

— 5-year turnover change: +8%

About the company. Real estate investor. It owns multiple office centers, and leases them to different companies from around the globe, among which are CAP Gemini, Hewlett Packard and other world-famous giants.

In the chart. Just like Bobst Group’s, CeGeReal’s stock prices stayed low for a long time after the crisis of 2008, and returned to the former positions only some time ago. At this moment CeGeReal’s stocks cost just like in 2007. The company usually pays dividends once a year, but there were no payments in 2012, while 2014 was marked by two payments.

Advantages for investors. Exciting 5-year profit growth, long-term positive stock price dynamics, dividends.

Disadvantages for investors. No significant disadvantages have been found.

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