Quality European stocks are demonstrating more strength than expected as companies report third quarter earnings.
The ALPS O’Shares Europe Quality Dividend ETF (OEUR) gained 3.94% last week, boosted by a better-than-feared earnings season so far for quality European stocks, ALPS wrote in an October 24 insight.
OEUR is designed to provide efficient and transparent access to a portfolio of large-cap and mid-cap dividend-paying companies in Europe selected based on several fundamental metrics, such as quality, low volatility, and dividend growth, according to ALPS.
Leading OEUR’s Information Technology sector last week, ASML Holding N.V. (ASML NA, 5.01% weight as of October 21) rallied over 16% after the semiconductor equipment maker beat third quarter earnings expectations and boosted its fourth quarter guidance with the company stating global demand for semiconductors continues to outpace supply, according to ALPS.
Enterprise software company SAP SE (SAP GR, 5.52% weight as of October 21) increased 4.45% last week after JPMorgan named the company its top pick in the European software space based on the growth potential for its cloud-based software, according to ALPS.
Falling natural gas prices coupled with strong earnings propelled the Industrials sector names in OEUR last week.
Ahead of Schedule
Last week, automation technology conglomerate ABB Limited (ABBN SW, 2.06% weight as of October 21) rose nearly 6% after reporting record margins in its third quarter earnings release and additionally announcing expectations to meet 2023 profitability goals one year ahead of schedule, driven by easing supply chain woes and higher product prices, according to ALPS.
Atlas Copco AB (ATCOA SS, 1.78% weight as of October 21), an industrial power company, rallied over 4% last week after reporting record revenues, orders, and profits in Q3 with positive commentary from analysts.
A.P. Mollner (MAERSKB DC, 1.35% weight as of October 21), the largest global shipping and logistics company, also gained over 4% last week on reports of shipping port productivity returning to normal, with supply chain lag times and shipping logjams trending back to 2019, or pre-pandemic, levels.
Other notable quality gainers in OEUR last week included Consumer Discretionary name Stellantis NV (STLA IM, 1.16% weight as of October 21), increasing 5.09% on European car sales rising 7.9% in September, boosting the automaker’s electric vehicle (EV) sales expectations, and Michelin (ML FP, 1.15% weight as of October 21), rising over 4% last week on the strong European car sales potentially boosting its vehicle tire sales, according to ALPS.
Other European equities ETFs include the iShares Europe ETF (IEV), the First Trust STOXX European Select Dividend Index Fund (FDD), and the WisdomTree Europe Hedged Equity Fund (HEDJ).
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