In this piece, we will take a look at the 11 most profitable European stocks. For more stocks, head on over to 5 Most Profitable European Stocks.
In today’s highly divided and turbulent political and economic environment, if there’s one thing that everyone can agree on, it’s that 2022 was not a good year for Europe. Just as Europeans (and the world) were recovering from the pain of the coronavirus and the lockdowns, the brutal Russian invasion of Ukraine started. This invasion shocked the global energy market and it made for a rude awakening for Europe which had come to rely on easily accessible Russian gas and oil. As nations scuttered to diversify their energy supply chains, inflation surged across the European nations. In the Eurozone area, which does not include the United Kingdom, inflation from July to December was caused primarily by soaring energy prices. In fact, data from Eurostat shows that energy inflation peaked in October 2022, when prices grew by 4.4% – more than a full percentage higher than the next biggest item which was food (2.47%).
These top two contributors to inflation were because of the Russian invasion since both Russia and Ukraine are among the largest grain producers in the world. Data from the United States Department of Agriculture (USDA) shows that Ukraine was the world’s fourth largest corn exporter and the fifth largest wheat exporter in April 2022 – only a couple of months after the Russian invasion. So naturally, a disruption in Ukraine creates a scarcity, which has been alleviated to an extent now after diplomatic efforts.
Europe’s biggest economy, Germany, was the most impacted by the energy disruptions. The German economy, which is a European powerhouse and dominated by large automakers such as Bayerische Motoren Werke Aktiengesellschaft (OTCMKTS:BMWYY), was still stuttering to maintain growth as recently as December 2022. Data from the German federal statistics office showed that the December slowdown managed to surprise analysts. German industrial production dropped by 3.1% over the previous month, while analysts had expected it to slow down by ‘only’ 0.7%. Highlighting the addiction to Russian energy, the energy intensive sectors dropped by an even larger 6.1% in December. For the full year, the German industry slowed down by 5% over 2019 – the last ‘normal’ year the world has witnessed since the coronavirus pandemic broke out. Overall, the GDP grew by 1.9% in 2022, down from the 2.6% growth that was recorded in 2021.
Another European nation – and one that isn’t part of the EU – that saw blistering inflation last year is the United Kingdom. The U.K.’s consumer price index (CPI) soared to 9.6% in October – the same year that the Eurozone as a whole also saw its prices peak. This shattered a three-decade old record for a country that had seen such high levels previously in November 2022 when the inflation sat at 9.2%. Once again, this was also fueled by high energy costs, since gas prices in Britain rose by an unbelievable 128.9% in December 2022 while electricity prices jumped by 65.4%. The U.K. was doubly hit, as a global economic slowdown and the strength of the U.S. dollar drove down the value of the British Pound. Since the country is a net importer, a cheaper pound makes imports more expensive, and further burdens an already troubled population.
Turning towards the corporate sector, high prices also affected firms’ daily business operations. The difficulties of October are clear in the performance of the flagship British FTSE stock market. Called the ‘footsie’, this index opened 2022 at 7,485 points but would tank to 6,826 by mid-October to mark an 8% drop. For the Euronext 100, the drop would be more painful. This index closed at 1,361 points in December 2021 and then dropped to 1,114 in October which saw it bleed 18% of its value. The French CAC 40 and the German DAX wouldn’t fare any better either. The CAC 40 also dropped by 18% between January and October 2022, and the DAX bled an even larger 24% of its value in the same time period.
Zooming in on the German industry, the automotive giant Volkswagen AG (OTC:VWAGY) saw its profit drop by a whopping 28% in the second quarter of 2022. Things did not improve much in the next quarter either, as the firm posted another profit drop of 26.5% during the third quarter.
With these details in mind, it becomes crucial to look at which European companies managed to survive a brutal year and are among the top profit makers. Out of the 11 firms in our list today, the top three are Shell plc (NYSE:SHEL), TotalEnergies SE (NYSE:TTE), and A.P. Møller – Mærsk A/S (OTCMKTS:AMKBY).
Image credit: Pixabay/Public Domain
Our Methodology
In order to sift out the most profitable European stocks, we took a look at different sectors such as shipping, automotive manufacturing, energy, telecommunications, and healthcare to identify the biggest companies. These were ranked through their net income and the top performers are listed.
11 Most Profitable European Stocks
11. Eni S.p.A. (NYSE:E)
Trailing Twelve Months Net Income: $17.8 billion (1EUR = 1.07USD)
Number of Hedge Fund Holders In Q3 2022: 6
Eni S.p.A. (NYSE:E) is an Italian energy giant. The firm is based in Rome, and it explores and sells both natural gas and crude oil. Additionally, the company also has a renewable energy division.
Eni S.p.A. (NYSE:E) disappointed Pakistan in February 2023 when it apologized from delivering a crucial Liquefied Natural Gas (LNG) cargo to the energy starved country. By the end of last year’s third quarter, six of the 920 hedge funds polled by Insider Monkey had invested in the company.
Eni S.p.A. (NYSE:E)’s largest shareholder is Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital which owns 2.4 million shares that are worth $51 million.
Shell plc (NYSE:SHEL), Eni S.p.A. (NYSE:E), TotalEnergies SE (NYSE:TTE), and A.P. Møller – Mærsk A/S (OTCMKTS:AMKBY) are among the most profitable companies in Europe.
10. Volkswagen AG (OTC:VWAGY)
Trailing Twelve Months Net Income: $17.87 billion (1EUR = 1.07USD)
Number of Hedge Fund Holders In Q3 2022: N/A
Volkswagen AG (OTC:VWAGY) is a German automotive giant. The firm makes and sells cars, trucks, buses, engines, and other mechanical products. It is based in Wolfsburg, Germany.
Volkswagen AG (OTC:VWAGY) is another big traditional car maker that is speeding the transition to electrification as it announced in February 2023 that it has submitted a five year plan to its supervisory board for speeding up the process.
9. GSK plc (NYSE:GSK)
Trailing Twelve Months Net Income: $17.98 billion (1GBP = 1.21USD)
Number of Hedge Fund Holders In Q3 2022: 37
GSK plc (NYSE:GSK) is one of the biggest pharmaceutical companies in the world. It makes and sells a variety of different drugs for cancer and immune system disorders and also has a consumer wellness division.
GSK plc (NYSE:GSK) scored a big win in February 2023 when it received full approval from the FDA for a cancer drug. Insider Monkey took a look at 920 hedge fund holdings for 2022’s final quarter and found out that 37 had bought the company’s shares.
GSK plc (NYSE:GSK)’s largest investor is Ken Fisher’s Fisher Asset Management which owns 12.1 million shares that are worth $358 million.
8. Hapag-Lloyd Aktiengesellschaft (OTCMKTS:HPGLY)
Trailing Twelve Months Net Income: $18.4 billion (1EUR = 1.07USD)
Number of Hedge Fund Holders In Q3 2022: N/A
Hapag-Lloyd Aktiengesellschaft (OTCMKTS:HPGLY) is a German marine shipping company. The firm operates both shipping vessels and container fleets, and it ships commodities as well as other products. Hapag-Lloyd Aktiengesellschaft (OTCMKTS:HPGLY) has more than two hundred ships in its fleet, and millions of tons of container and cargo carry capacity. It also lets customers ship their containers inland, and is headquartered in Hamburg, Germany.
Amidst the global shipping crisis that has refused to go away since the coronavirus pandemic upended the industry, Hapag-Lloyd Aktiengesellschaft (OTCMKTS:HPGLY) won some respite in January 2023 when a Canadian court ordered a trading company to pay it $3.2 million for a plastics shipment that was rejected at a Thailand port due to a change in the country’s environmental regulations. The disputed containers were left at the port for more than two years and some had to be destroyed.
7. Bayerische Motoren Werke Aktiengesellschaft (OTCMKTS:BMWYY)
Trailing Twelve Months Net Income: $19.3 billion (1EUR = 1.07USD)
Number of Hedge Fund Holders In Q3 2022: N/A
Bayerische Motoren Werke Aktiengesellschaft (OTCMKTS:BMWYY) is the official name for one of the most popular car companies in the world, commonly known as BMW. The company sells different cars such as sedans and sport utility vehicles (SUVs), buses, trucks, and motorcycles. Additionally, Bayerische Motoren Werke Aktiengesellschaft (OTCMKTS:BMWYY) also sells some of the most luxurious vehicles in the world under the Rolls-Royce branding.
Bayerische Motoren Werke Aktiengesellschaft (OTCMKTS:BMWYY) and Volkswagen won a court battle in the U.K. in February 2023 when the judge ruled that they were under no obligation to provide the British antitrust watchdog CMA with any data for companies based outside the U.K.
6. Equinor ASA (NYSE:EQNR)
Trailing Twelve Months Net Income: $28.7 billion
Number of Hedge Fund Holders In Q3 2022: 17
Equinor ASA (NYSE:EQNR) is a Norwegian state owned oil company. The firm has more than five billion barrels of oil equivalent reserves.
Equinor ASA (NYSE:EQNR) made a big oil discovery in February 2023, as it announced that it has found up to 47 million barrels of new oil reserves in the Troll field. Insider Monkey took a look at 920 hedge fund holdings for last year’s third quarter to discover that 17 had held a stake in the firm.
Equinor ASA (NYSE:EQNR)’s largest investor is Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital which owns 9.9 million shares that are worth $329 million.
Along with Shell plc (NYSE:SHEL), TotalEnergies SE (NYSE:TTE), and A.P. Møller – Mærsk A/S (OTCMKTS:AMKBY), Equinor ASA (NYSE:EQNR) is another profitable European stock.
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Disclosure: None. 11 Most Profitable European Stocks is originally published on Insider Monkey.