7 top EU growing stocks

7 top EU growing stocks

We continue our spring series of reviews on stocks that have seen the biggest increase in price over the past 12 months, and today we will talk about the best-performing EU companies.

All of the companies in the review have a market cap of at least €4B and a P/E ratio not exceeding 61 which ensures that they are largely known in the stock market and at the same time are unlikely to turn out to be bubbles.

1. Wirecard AG

Wirecard credit card

  • Symbol: WDI
  • Exchange: XETRA
  • Country: Germany
  • Currency: EUR
  • Market cap: €12B
  • Annual turnover: €1.0B
  • P/E ratio: 56
  • Dividend yield: 0.2%
  • YTD performance: +115%

Description. A technology company engaged in Internet payment and processing services. Wirecard provides software and systems for online payments, electronic funds transfer, and risk management. The company also operates as a bank, offering prepaid, debit, and credit cards optimized for use with the company’s software products.

Chart. No data on the stock is available before late 2011, but since then the general trend was positive: the share price increased more than tenfold over the period, hitting an all-time high in early 2018. The company pays a steady, although quite modest yearly dividend.

Pros. Best share-price gain in the review, long-term share price uptrend.

Cons. Relatively high P/E ratio, probably indicating the imminent completion of the current growth spurt; extremely low dividends; low market cap to turnover ratio.

2. Deutsche Lufthansa

Lufthansa airplane

  • Symbol: LHA
  • Exchange: XETRA
  • Country: Germany
  • Currency: EUR
  • Market cap: €13B
  • Annual turnover: €32B
  • P/E ratio: 7.3
  • Dividend yield: 1.8%
  • YTD performance: +105%

Description. The largest German airline and the largest air carrier in Europe in terms of fleet size. Founded in 1926, the company managed to increase its fleet to 162 aircrafts in just a few years and became famous for the first transcontinental flight to China. The fleet operated until 1945 when all services were suspended following the defeat of Nazi Germany. The company was re-founded in the 1950s, and already in 1960 replaced almost entire fleet to jetliners. Until 1994, Lufthansa was a state-owned enterprise but went public by 1997. Today, its fleet of 620 aircraft connects 78 countries, and annual passenger traffic exceeds 100 million.

Chart. The stock has long been traded in a tight range, mostly between 10 and 20 EUR a share, but in 2017 soared to an all-time high of 31 EUR. The company pays dividends once a year, but not quite regularly.

Pros. Excellent share price performance; relatively low P/E (probably indicating the rally is not over yet).

Cons. No significant disadvantages were found.

3. Ubisoft Entertainment

The Rayman Origins game

  • Symbol: UBI
  • Exchange: Euronext Paris
  • Country: France
  • Currency: EUR
  • Market cap: €7.5B
  • Annual turnover: €1.5B
  • P/E ratio: 57
  • Dividend yield: -
  • YTD performance: +95%

Description. One of the largest game developers in Europe, Ubisoft produces, edits, and distributes video games. The company was founded in 1986 and started developing its own games in 1994. The first and one of the most famous games from Ubisoft was the Rayman series. Assassin’s Creed, Prince of Persia, Tom Clancy’s, and others. Ubisoft has offices in more than 20 countries including the US, Canada, Spain, China, Germany, Russia, Bulgaria, Ukraine, Romania, and Italy.

Chart. The company went public in 1999, and its share price largely followed the global economic trends ever since. The chart shows a rally in 2000, then a deep recession in 2003, followed by a new boom in 2008 and another recession that lasted till late 2011. However, the stock grows steadily since 2012. In 2016, it recovered to the record high of 2008 and doubled it in 2017.

Pros. Long-term share price uptrend.

Cons. Increased correction risk after a recent rally (as indicated by a relatively high P/E ratio), no dividend payout.

4. Uniper

Uniper employees

  • Symbol: UN01
  • Exchange: XETRA
  • Country: Germany
  • Currency: EUR
  • Market cap: €8.8B
  • Annual turnover: €67B
  • P/E ratio: 5.4
  • Dividend yield: 2.3%
  • YTD performance: +93%

Description. An international energy company formed as a result of a larger holding company E.ON break-up. Uniper owns and manages a portfolio of power plants located across Europe and Russia, as well as focuses on commodity trading business. In the EU, it currently invests mostly in the Czech Republic, as well as in Russia and Brazil.

Chart. As for the last two years, the share price has been growing: over the period it increased 2,5 times. The company paid dividends only once so far, namely in 2017.

Pros. Two-year share price uptrend; acceptable dividend yield; relatively low P/E ratio; good market cap to turnover ratio.

Cons. No significant disadvantages were found.

5. NMC Health

NMC hospital

  • Symbol: NMC
  • Exchange: London Stock Exchange
  • Country: United Kingdom, United Arab Emirates, Spain
  • Currency: GBP
  • Market cap: €8.3B
  • Annual turnover: €993M
  • P/E ratio: 61
  • Dividend yield: 0.5%
  • YTD performance: +92%

Description. A private healthcare services provider in the United Arab Emirates and Spain. The company is engaged in providing professional medical services, including diagnostics, all types of research and medical services in the field of gynecology, obstetrics and human reproduction and retailing of pharmaceutical goods. It also provides management services in the industry. The company owns and operates hospitals, day surgery centers, medical centres, and pharmacies. Its distribution segment is also engaged in wholesale trading of pharmaceutical goods, medical equipment, cosmetics, and food.

Chart. No data on the stock is available before 2011, but since then the general trend remains positive, having the share price increased almost 16 times — It is no exaggeration to say that the company became almost twice as valuable every year. NMC Health pays a steady but insignificant yearly dividend.

Pros. Great long-term share price uptrend.

Cons. High P/E ratio; extremely low dividends; low market cap to turnover ratio. (the company seems to be overpriced.)

6. Banco Comercial Portugues

Banco Comercial Portugues office

  • Symbol: BCP
  • Exchange: Euronext Lisbon
  • Country: Portugal
  • Currency: EUR
  • Market cap: €4.4B
  • Annual turnover: €1.9B
  • P/E ratio: 24
  • Dividend yield: -
  • YTD performance: +92%

Description. The largest privately owned bank in Portugal. The company offers a range of financial products and services, including current accounts, payment systems, savings and investment products, as well as asset management and investment banking services. The bank engaged in investment activities, including real estate. Its offices are located in Poland, Portugal, Mozambique, Angola, and Switzerland.

Chart. The bank has been on the market for quite some time, but the stock price data for early 2017 are not accurate. Therefore, only later price movements are shown in the graph. For a long time until 2017, the bank’s shares were losing value but are now recovering.

Pros. Good share price performance; relatively low P/E.

Cons. No dividend payout.

7. FinecoBank

FinecoBank logo

  • Symbol: FBK
  • Exchange: Borsa Italiana
  • Country: Italia
  • Currency: EUR
  • Market cap: €6.0B
  • Annual turnover: €265M
  • P/E ratio: 28
  • Dividend yield: 2.9%
  • YTD performance: +83%

Description. An Italian financial service company and a subsidiary of a famous financial conglomerate UniCredit. The bank is focused on providing commercial banking services in the domestic market but is also engaged in brokerage and consulting services.

Chart. Since 2014, the bank’s shares have gained in price by 2.5 times, although the increase was far from being uniform: there was a big upswing in 2015, followed by a decline in 2016, then an even sharper rise in 2017 and an all-time high in 2018. The bank pays yearly dividends which, while being modest by general standards, is pretty decent if compared to others in the review.

Pros. Good share price performance, highest dividend amongst all companies in the review.

Cons. Extremely low market cap to turnover ratio.

The review is based on data from https://www.google.com/finance. The charts show the currencies of the respective exchanges. The companies’ market capitalization and turnover are shown in euro (exchange rate adjusted).

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