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Companies with strong earnings growth, defensive qualities, low volatility and high margins: According to Goldman Sachs, this mix makes it possible for stocks with such characteristics to be preferred by investors for a longer period of time and even outperform the overall market. when the stock market falls. As a rule, such companies also have a certain size.
The strategists of the US investment bank created a basket of eleven large companies from Europe, most of which have the advantages mentioned above. Moreover, companies predominantly have strong balance sheets and sustainable dividend payouts.
Among the eleven companies are three Swiss companies. Not surprisingly, these are the stocks that dominate the Swiss Market Index: Nestlé, Novartis and Roche. The dividend yield of all three stocks is at least 3 percent. Continuity pays off: Roche increased its dividend for the 36th consecutive year this year.
Pharmaceutical industry dominates
Overall, traditionally defensive pharmaceutical stocks dominate Goldman Sachs’ basket of European stocks. It also includes British companies GlaxoSmithKline and Astrazeneca, followed by French Sanofi and Danish Novo Nordisk.
Dutch chip machine manufacturer ASML and German business software manufacturer SAP are also known as solid companies in the technology sector. French companies LVMH (luxury products) and L’Oréal (cosmetics) completed the Goldman Sachs analyst selection.
However, experts state that the aforementioned stocks also carry risks. Then, if a return to cyclical stocks occurs due to the improving stock market situation. Or when stock valuations get too expensive. The euro could pose more risks if it continues to appreciate.
Especially the recession concerns in the USA are affecting the market right now. So, as Goldman Sachs calculates in another study cited by Bloomberg, falling corporate profits this year should cut the dividends of companies in the US stock index S&P 500 by about 4 percent in 2024. By then, reliable “dividend payers” will be in greater demand.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
