Euro Stoxx 50: how to invest in the best stocks

The Euro Stoxx 50 is a stock index that was first introduced on February 26, 1998, by a company called STOXX, which is part of the Deutsche Börse Group. This index consists of 50 stocks from 11 different countries in the euro area. It includes well-established companies that are considered leaders in their respective industries. In total, the Euro Stoxx 50 represents about 57% of the combined market value of the countries it covers.

Additionally, there are futures and options available for trading based on the EURO STOXX 50 index. These financial products are traded on Eurex and are known for their high liquidity, making them some of the most actively traded derivatives not only in Europe but also globally.

Investing in high-yield stocks within the Euro Stoxx can be advantageous for several reasons:

1. Geographical diversification: The Euro Stoxx comprises companies from various European countries. This offers investors a chance to diversify their holdings geographically. This diversification helps lower the risk associated with investing in a single national market.
2. Sectoral diversification: The index includes companies from a broad spectrum of sectors. This means that investors can also diversify across different industries. This diversification reduces their exposure to risks specific to any one sector.
3. Dividend income: Many companies within the index distribute dividends to their shareholders. These dividends can serve as a stable source of income for investors.
4. Growth potential: Some of the companies in the index have strong potential for long-term growth. This potential can lead to significant gains for investors over time.

How are the best stocks chosen?

When selecting stocks within an index like the Euro Stoxx 50, several common criteria are often considered:

1. Future prospects: Evaluating a company’s future prospects involves researching industry trends, growth strategies, and market analyst forecasts related to the company’s operations.
2. Financial stability: Assessing financial stability includes analysing the company’s balance sheet, debt levels, and its ability to generate positive cash flows.
3. Dividends: A company’s dividend history and the sustainability of these payments can provide insight into how the investment can generate passive income.
4. Valuation: Determining whether a stock is currently overvalued or undervalued compared to its intrinsic value, often by using indicators like Price/Earnings ratios, helps decide if it’s a good time to invest.
5. Volatility: Considering a stock’s volatility is crucial to assess the associated investment risk. Stocks that exhibit excessive volatility may not be suitable for investors with a low-risk tolerance.
6. Sector position: Comparing a company with its competitors within the same industry offers perspective on its position and ability to compete effectively.
7. Macroeconomic trends: Taking into account macroeconomic trends like interest rates, inflation, and economic policies can influence stock selection decisions.

Best stocks in the Euro Stoxx 50 index

ADIDAS

• Market capitalisation (EUR): 31.39 bn
• Dividend YLD:0.40%
• P/E (normalised earnings): 72.1041
• Company profile: Adidas AG is a Germany-based company that designs, develops, produces and markets a range of sports products. The company’s segments include Europe, North America Adidas, North America Reebok, Asia-Pacific, Russia/CIS, Latin America; Emerging Markets, Adidas Golf, Runtastic and other centrally managed activities. Each segment includes wholesale, retail and e-commerce businesses related to the distribution and sale of Adidas and Reebok brand products to retail customers and consumers. The company has over 2,300 retail stores, over 14,000 mono-brand franchise stores and over 150,000 wholesalers. Adidas and Reebok branded products include footwear, apparel and accessories, such as bags and balls.
• Financial summary: For H1 2023, Adidas AG reported a 3% decrease in revenue to 10.62 billion EUR. Attributable net income to common shareholders, excluding extraordinary items, decreased by 92% to 52 million EUR. The revenue decline was driven by a 17% decrease in the North America segment, a 4% decrease in the Greater China segment, and a 17% decrease in retail sales in North America. Net income also decreased, mainly due to a 76% decrease in income from the North America segment.

AIRBUS

• Market capitalisation (EUR): 103.13 billion
• Dividend YLD: 1.17%
• P/E (normalised): 24.20
• Company profile: Airbus SE, formerly Airbus Group SE, is a Netherlands-based company active in the aerospace and defence sector. The Company operates through three segments: Airbus Commercial Aircraft, Airbus Helicopters and Airbus Defence and Space. The Airbus Commercial Aircraft segment focuses on the development, production, marketing and sale of components for aircraft and related services. The Airbus Helicopters segment specialises in the development, production, marketing and sale of civil and military helicopters, as well as related services. The Airbus Defence and Space segment produces military combat and training aircraft, provides electronics for defence and global security market solutions, and produces and markets missiles.
• Financial summary: For H1 2023, Airbus SE reported an 11% increase in revenue to 27.66 billion EUR. However, net income decreased by 20% to 1.53 billion EUR. The revenue increase was driven by growth in the Airbus segment, Airbus Helicopters, Asia/Pacific, and North America. Net income declined primarily due to a 14% increase in research and development expenses.

ALLIANZ

• Market capitalisation (EUR): 91.47 billion
• Dividend YLD 5.02%
• P/E Ratio 14.18477
• Company profile: Allianz SE is a financial services company based in Germany. The company’s segments include Property & Casualty, Life/Health, Asset Management and Corporate & Other. The company offers a range of reinsurance coverages, primarily to Allianz insurance entities, as well as to third-party customers. The Property & Casualty segment offers a range of products and services for private and corporate customers. The Life/Health segment offers a range of life and health insurance products. The Asset Management segment provides institutional and retail asset management products and services to third-party investors and provides investment management services to the Allianz Group’s insurance operations. The Corporate & Other segment includes holding and treasury, banking, and alternative investments.
• Financial summary: For H1 2023, Allianz SE reported a 43% decrease in revenue to 42.03 billion EUR. However, net income applicable to ordinary shareholders increased by 78% to 4.37 billion EUR. The revenue decrease was mainly due to changes in financial income/expenses from insurance contracts. Net income improved significantly, driven by an increase in income from the Life/Health segment.

BNP Paribas

• Market capitalisation (EUR): 73.89 billion
• Dividend YLD: 6.51411%
• P/E Ratio: 10.64
• Company profile: BNP Paribas SA is a financial services company based in France. The company provides banking and financial services. It operates through two divisions: Retail Banking and Services, and Corporate and Institutional Banking (CIB). The Retail Banking and Services division includes retail banking networks and specialised financial services in France and abroad. The Retail Banking and Services division is divided into national and international financial services markets. The national markets include French Retail Banking (FRB); BNL Commercial Banking (BNL bc), Italian Retail Banking; Belgian Retail Banking (BRB), and Other Domestic Market activities, including Luxembourg Retail Banking (LRB). Its international financial services include Europe-Mediterranean, BancWest, Personal Finance, Insurance and Wealth Management. CIB includes Corporate and Institutional Banking, Global Markets and Securities Services. It operates through Financiere des Paiements Electroniques SAS.
• Financial summary: For H1 2023, BNP Paribas SA reported interest income of 36 billion EUR, reflecting an increase from 16.92 billion EUR. However, net interest margin after provisions for loan losses decreased by 14% to 7.73 billion EUR. Net income applicable to common shareholders, excluding extraordinary items, decreased by 7% to 3.98 billion EUR. The increase in interest income was accompanied by an increase in interest-bearing liabilities.

Danone

• Market capitalisation (EUR): 36.28 billion
• Dividend YLD 3.74%
• P/E Ratio: 19.29
• Company profile: DANONE S.A. operates through four divisions: the Fresh Dairy Products division, the Waters division, the Early Life Nutrition division and the Medical Nutrition division. The Fresh Dairy Products division is engaged in the production and distribution of yoghurt, fermented dairy products and other fresh dairy specialities. The Waters division includes natural bottled water with Aquadrinks (flavoured waters and vitamin-enriched with natural fruit juice extracts, fruit juice and vitamins). The Early Life Nutrition division focuses on the right nutrition in the first thousand days from the beginning of pregnancy to two years of age, also it is engaged in the production and distribution of food products intended for newborns and early childhood as an addition to breastfeeding. The Medical Nutrition division is engaged in the production and distribution of food products for elderly or suffering people.
• Financial summary: For H1 2023, Danone SA reported a 6% increase in revenue to 14.17 billion EUR. Net income applicable to common shareholders increased by 48% to 1.09 billion EUR. The revenue growth was driven by increased sales across various segments, including Essential Dairy & Plant-based, Specialised Nutrition, Water, Northern America, and Europe.

DEUTSCHE TELEKOM

• Market capitalisation (EUR): 102.42 billion
• Dividend YLD: 3.4%
• P/E Ratio 9.69
• Company profile: Deutsche Telekom AG is a Germany-based company providing information technology (IT) and telecommunications services. The Company’s operating segments include Germany, consisting of fixed and mobile network activities in Germany; United States, which consists of mobile activities in the US market; Europe, consisting of fixed and mobile network operations of national companies in various European countries, such as Greece, Romania, Hungary, Poland, Czech Republic, Croatia, Slovakia, Austria, Albania, Macedonia and Montenegro; Systems Solutions, which manages information and communication technology (ICT) systems for multinationals and public sector institutions; Group Development, comprising T-Mobile Netherlands and Deutsche Funkturm (DFMG) entities and its stake in Stroeer SE & Co. KGaA and Group Headquarters & Group Services, which comprises the service headquarters operations and various other subsidiaries of the Company.
• Financial summary: In H1 2023, Deutsche Telekom AG reported a 1% decrease in revenue to 55.05 billion EUR. Net income attributable to common shareholders, excluding extraordinary items, decreased by 38% to 3.21 billion EUR. The revenue decrease was attributed to a 63% decrease in the Group Development segment. Net income was impacted by income from disposals and sale of assets, which decreased by 99% to 19 million EUR.

Essilor Luxottica

• Market capitalisation (EUR):78.83 billion
• Dividend YLD: 1.85%
• P/E Ratio: 28.34
• Company Profile: Essilor Luxottica SA, formerly Essilor International Compagnie Generale D Optique SA, is a company specialising in ophthalmic optics, based in France. The company designs, manufactures and markets a wide range of lenses, frames and sunglasses to improve and protect vision. It also develops and markets equipment for prescription laboratories and instruments, as well as services for vision specialists. It operates in three segments: Lenses and Optical Instruments, which includes corrective lenses, and instruments intended for opticians and optometrists; Equipment, which includes machinery and consumables used by plants and prescription laboratories, and Sunglasses and Reading Glasses, which includes reading glasses and non-prescription sunglasses. The company manages a number of brands, including Ray-Ban, Oakley and Varilux, among others. The company operates in Europe, North America, Asia Pacific, Middle East, Africa and Latin America.
• Financial summary: In H1 2023, Essilor Luxottica SA’s revenue increased by 7% to EUR 12.85 billion. Net income applicable to common shareholders increased by 16% to EUR 1.36 billion. Revenues reflect a 7% increase in the Direct to Consumer segment to EUR 6.62 billion, a 7% increase in the Professional Solutions segment to EUR 6.23 billion, a 7% increase in the EMEA segment to EUR 4.72 billion, and a 5% increase in the North America segment to EUR 5.89 billion.

INTESA SANPAOLO

• Market capitalisation (EUR): 45.25 billion
• Dividend YLD: 6.62%
• P/E Ratio: 7.45
• Company profile: INTESA SANPAOLO SPA is a banking company based in Italy. It operates through six business segments: Banca dei Territori, IMI Corporate & Investment Banking, International Subsidiary Banks, Asset Management, Private Banking and Insurance. Banca dei Territori includes traditional lending and savings activities in Italy and related financial services. IMI Corporate & Investment Banking covers corporate banking, investment banking and public finance in Italy and abroad. International Subsidiary Banks oversees the company’s business operations in international markets through subsidiaries and affiliates. Private Banking provides specific products and services to private individuals and high-net-worth individuals. Asset Management develops asset management solutions. Insurance oversees the management of the subsidiaries Intesa Sanpaolo Vita S.p.A. and Fideuram Vita S.p.A., as well as developing a mix of insurance products. The Bank has an international presence.
• Financial summary: In H1 2023, Intesa Sanpaolo SpA’s interest margin increased from €6.59 billion to €14.5 billion. The net interest margin increased 54% to €7.93 billion. Net income increased 80% to €4.22 billion. The net interest margin excluding provisions for loan losses reflects a 58% increase in the territorial banks segment to €2.67 billion and an increase in the foreign banks segment from €521 million to €1.05 billion.

LVMH

• Market capitalisation (EUR): 368.7 billion
• Dividend YLD: 1.70%
• P/E ratio: 25.82
• Company profile: LVMH Moet Hennessy Louis Vuitton SE is a luxury group based in France active in six sectors: Wines and Spirits, Fashion and Leather Goods, Perfumes and Cosmetics, Watches and Jewelry, Selective Retail and Other Activities. Wines and Spirits owns multiple brands, including Moet & Chandon, Krug, Veuve Clicquot, Hennessy and Chateau d’Yquem, among others. Fashion and Leather Goods brands like Louis Vuitton, Christian Dior and Givenchy, among others. Perfumes and Cosmetics include Parfums Christian Dior, Parfums Givenchy Guerlain, Benefit Cosmetics, Fresh and Make Up For Ever, among others. Other activities include lifestyle, culture and art brands such as Les Echos, Royal Van Lent and Cheval Blanc. The Company is active worldwide.
• Financial summary: In H1 2023, LVMH Moet Hennessy Louis Vuitton SE’s revenues increased 15% to EUR 42.24 billion. Net income increased 30% to EUR 8.48 billion. Revenues reflect a 17% increase in the Fashion and Leather Goods segment to EUR21.13B, a 26% increase in the Selective Retail segment to EUR 8.3 billion, a 19% increase in the Asia (ex Japan) segment to EUR 14.15 billion, and a 19% increase in the Europe (ex France) segment to EUR 6.52 billion.

Euro Stoxx 50 with Admirals

With the Admirals broker, CFD trading allows you to trade the Euro Stoxx 50 index. If you already have an account open and want to open CFD positions on the EuroStoxx 50 in MetaTrader, follow these steps:

• Go to the ‘View’ tab and click on ‘Market Watch’
• Search under ‘Symbol’ for the EuroStoxx 50 index (STOXX50)
• Double-click on the symbol
• In the window that appears you will see all the necessary information to open the position
• Click on ‘Sell’ or ‘Buy’

Key sectors in the Euro Stoxx 50

The most promising sectors in the index include:

• Technology: The technology sector has traditionally been a key sector in Western Europe, with companies like SAP SE (SAP) in Germany and ASML Holding NV (ASML) in the Netherlands. Recent developments in digital innovation and artificial intelligence have further boosted the sector’s potential.
• Energy: European energy companies are increasingly focused on transitioning to cleaner and renewable energy sources. Companies like TotalEnergies SE (TTE) in France and Royal Dutch Shell (RDSA) in the Netherlands are actively involved in this transition.
• Health: The health sector is experiencing continuous growth due to Europe’s ageing population. Major players in this sector include companies like Novartis (NOVN) in Switzerland and Sanofi (SAN) in France.
• Finance: Banks and financial institutions have rebounded after the challenges of the past decade, benefiting from interest rate increases. These institutions now present an opportunity that combines a defensive posture due to heavy regulation with growth prospects driven by investments in fintech. Prominent European banks in this context include BNP Paribas (BNP) in France and Banco Santander (SAN) in Spain.
• Telecommunications sector: Companies such as Deutsche Telekom AG (DTE) in Germany and Telefonica SA (TEF) in Spain operate in the telecommunications sector. These companies are often considered defensive investments, known for their stability.

In the European context, it’s essential to recognise the significance of other major indices alongside the Euro Stoxx 50:

• DAX 30: Represents the core of the German economy, featuring the top 30 companies listed in Germany.
• FTSE MIB: Serves as the benchmark for the Italian stock market, comprising the primary 40 companies listed on the Italian Stock Exchange.
• IBEX 35: Reflects the performance of the 35 most liquid companies on the Spanish continuous market.
• CAC: Represents the 40 largest companies listed on the Paris Stock Exchange.

Understanding the performance and trends in these indices is essential, as they provide a complete overview of the European stock landscape, completing our analysis of the EuroStoxx 50.

Buying Euro Stoxx 50 stocks with Freedom24

Freedom24 has a flexible offer if you want to trade Euro Stoxx 50 stocks with ease. Here is a quick overview of its main account types:

Among the other advantages of investing in stocks with Freedom24 is the possibility of maximising savings with a deposit account that yields 3% (for USD) and 2.5% (for EUR). There are no limits to the maximum deposit amount, the money can be transferred or withdrawn at any time and is available on all plans.

Have a look at our Freedom24 review for more information about this broker.

Investing in Eurostoxx 50 growth stocks

Among the main benefits of investing in stocks with high growth potential (investing in growth stocks), we can highlight:

• Protection against inflation: Historically, stock markets have consistently delivered positive real returns, helping to counter the erosion of purchasing power caused by inflation. This resilience is due, in part, to companies’ ability to adjust product and service prices during periods of positive or high inflation.
• Capital appreciation: Stocks of companies with robust long-term growth potential tend to appreciate significantly over time. While short-term fluctuations may occur, these are typically part of an overall upward trend, with positive and negative oscillations balanced around the growth trajectory.
• Dividends: Many publicly traded companies regularly distribute dividends to their shareholders. These dividends provide a reliable source of passive income for investors, indicating the company’s capacity to generate consistent positive cash flows to sustain long-term growth. Have a look at this dividends guide if you are interested in generating reliable passive income.

Learn more about indices

• Dow Jones Stocks with Best Dividends
• Global stock indices
• Dow Jones guide

Summary

In conclusion, the Euro Stoxx 50 stands as a dynamic and diversified index, representing a wide array of European blue-chip companies. Investors are drawn to this index for several compelling reasons, such as diversity, growth potential, and stability.

Eurostoxx 50 Stock List

FAQs