In this piece, we will take a look at the 11 best European stocks to buy now. If you want to skip our introduction to the European economy and major companies and countries, then take a look at the 5 Best European Stocks To Buy Now.
Europe is one of the most developed continents in the world, and also one that has played a central role in global technological and philosophical developments. The continent is known for its contributions to science, astronomy, and other fields that have enabled humanity to literally reach for the stars as well as improve the standard of living.
Naturally, spearheading the industrial revolution has led to its own set of wealth and prosperity benefits. The British Empire, the largest empire of its kind to ever have existed, the advanced manufacturing powerhouse of Germany, the financial centers of Switzerland, and the advanced manufacturing capabilities of France and Italy have made European nations among the richest in the world with some of the largest economies.
In fact, a brief look at our coverage of 50 Largest Economies in the World in 2023 reveals that out of the 50 countries covered, 20 are European nations. The continent's largest economy is the ailing economic giant Germany. Germany is known for its powerhouse car companies such as Bayerische Motoren Werke Aktiengesellschaft (OTCMKTS:BMWYY), Volkswagen AG (OTCMKTS:VWAGY), and Mercedes-Benz Group AG (ETR:MBG.DE). However, the German manufacturing sector is in a world of trouble these days. Its operations were already hit by the coronavirus pandemic which enforced lock downs and sapped economic activity. Yet, just as things were recovering, the Russian invasion of Ukraine upended Germany's gas supplies.
This was devastating for manufacturing, with German industrial production dropping by 1.5% in June over May as it was led by automotive production decreasing by 3.5%. German car output was 10% lower in the first half of 2023 over the first half of 2019, with Volkswagen's H1 2023 deliveries to China dropping by 1.2% annually. The troubled car industry also created friction within the halls of the European Union earlier this year after the bloc and Germany disagreed with allowing synthetic fuel run cars within the EU after 2035.
Another European nation that has dealt with a historic set of challenges lately is the United Kingdom. The U.K. has a GDP of $3.3 trillion making it the sixth largest in the world. Britain houses some of the largest companies in the world in lucrative sectors such as energy, retail, banking, insurance, and mining. Some notable examples of British firms are Shell plc (NYSE:SHEL), BP p.l.c. (NYSE:BP), Tesco PLC (LON:TSCO.L), HSBC Holdings plc (NYSE:HSBC), Aviva plc (LON:AV.L), and Rio Tinto Group (NYSE:RIO). The global nature of these companies and the export oriented model of the British economy means that if the global economy is performing well, British firms do well and their performance translates into share price gains of the FTSE stock index.
Briefly analyzing the performance of these top British companies shows that Shell has benefited from its foresight to invest in the natural gas market. During the third quarter, Shell's integrated gas revenue jumped to $2.529 billion over the second quarter's $2.498 billion. This growth came at a time when Shell was nursing its wounds from the oil industry's return to ground in 2023 in the form of lower prices which made the British oil giant's profit drop by 36%. While a sizeable reduction, this was still quite lower in percentage terms than Exxon Mobil Corporation (NYSE:XOM)'s 54% annual profit hit during the third quarter.
The British mining giant Rio Tinto is one of the biggest mining companies in the world. Rio Tinto's shares have been favored by some analysts this year. For instance, Bernstein and Morgan Stanley upgraded the stock to Outperform and Overweight from Market Perform and Equal Weight in May 2023. Then, the latest stock upgrade came in October 2023 when UBS upgraded the shares to Neutral from an earlier Sell. Its note outlined that iron ore prices can stabilize to range between $100 and $130 per tonne over the next six months. These can allow Rio Tinto to pay lucrative dividends to investors, with UBS' estimated dividend yield for the stock sitting at 7%. Rio Tinto Group (NYSE:RIO)'s Australian stock currently pays an AUD1.47 dividend for a 4.79% yield, while the NYSE shares have a $1.67 dividend for a 10.09% yield which has increased this year as the stock is down by 6.7% year to date.
So, with Shell, Rio Tinto, HSBC, and others out of the way, you might be wondering what are some top European stocks to buy? Well, we took a look and the top three European stocks to buy are PDD Holdings Inc. (NASDAQ:PDD), Linde plc (NYSE:LIN), and Medtronic plc (NYSE:MDT).
To compile our list of the best European stocks to buy, we first made a list of the 40 largest European stocks that trade on American exchanges. Then, those with the greatest number of hedge fund shareholders in 2023 were selected as the best European stocks to buy.
AstraZeneca PLC (NASDAQ:AZN) is a British healthcare company headquartered in Cambridge, the United Kingdom. It develops treatments for cancer, infectious diseases, and other ailments. The firm started off October on a strong note as it revealed that its drug for treating kidney diseases showed a strong response in a Phase 2b trial and led to a reduction in indicators of the disease.
As of Q2 2023 end, 41 out of the 910 hedge funds part of Insider Monkey's database had held a stake in AstraZeneca PLC (NASDAQ:AZN). Out of these, the firm's largest shareholder is Rajiv Jain's GQG Partners as it owns 21 million shares that are worth $1.5 billion.
Along with PDD Holdings Inc. (NASDAQ:PDD), Linde plc (NYSE:LIN), and Medtronic plc (NYSE:MDT), AstraZeneca PLC (NASDAQ:AZN) is a top European stock that hedge funds are buying.
Shell plc (NYSE:SHEL) is a British energy giant. It is one of the few mega oil company stocks to have secured an average Strong Buy rating from analysts with a $8 share price upside. Shell plc (NYSE:SHEL)'s third quarter earnings were a strong set of results that saw the firm woo investors and announce a $3.5 billion share buyback.
During this year's June quarter, 43 among the 910 hedge funds tracked by Insider Monkey were the firm's investors. Shell plc (NYSE:SHEL)'s biggest hedge fund stakeholder is Ken Fisher's Fisher Asset Management courtesy of a $1.3 billion investment.
Novo Nordisk A/S (NYSE:NVO) is a Danish pharmaceutical giant that focuses on developing diabetes and obesity treatments. The firm's shares saw turbulence in November 2023 as its head of commercial strategy sold $1.3 million worth of shares which led to a price drop. However, Jefferies' DKK5 share price upgrade stemmed some of the losses.
By the end of 2023's second quarter, 43 out of the 910 hedge funds polled by Insider Monkey had bought and held Novo Nordisk A/S (NYSE:NVO)'s shares. Jim Simons' Renaissance Technologies owns the largest stake among these which is worth $1.5 billion.
NXP Semiconductors N.V. (NASDAQ:NXPI) is a semiconductor firm that provides products for industrial, automotive, and other use cases. The firm has managed to weather the recent storm in the chip sector admirably since it has beaten analyst EPS estimates in all four of its latest quarters.
For their June quarter of 2023 investments, 48 out of the 910 hedge funds part of Insider Monkey's survey had invested in the chip company. NXP Semiconductors N.V. (NASDAQ:NXPI)'s biggest hedge fund investor is Robert Rodriguez And Steven Romick's First Pacific Advisors LLC as it owns $162 million worth of shares.
Chubb Limited (NYSE:CB) is a Swiss insurance and reinsurance products and services provider. Its third quarter earnings saw the firm's management tout strong underwriting margins and more than $1.4 billion in net investment income.
During 2023's second quarter, out of the 910 hedge funds tracked by Insider Monkey, 50 were Chubb Limited (NYSE:CB)'s investors. Israel Englander's Millennium Management owns the largest stake among these which is worth $291 million and comes via 1.5 million shares.
Eaton Corporation plc (NYSE:ETN) is an Ireland based industrial products provider that sells power management and distribution products. The firm's third quarter results saw it set a record for earnings per share which stood at $2.22, and in a rather interesting play on numbers, also marked a 22% annual growth!
51 out of the 910 hedge funds part of Insider Monkey's Q2 2023 database had held a stake in the company. Eaton Corporation plc (NYSE:ETN)'s biggest hedge fund shareholder is Philippe Laffont's Coatue Management due to its $357 million stake.
PDD Holdings Inc. (NASDAQ:PDD), Eaton Corporation plc (NYSE:ETN), Linde plc (NYSE:LIN), and Medtronic plc (NYSE:MDT) are some best European stocks to buy.
