The GRANOLAS Stocks Outperform the Magnificent 7 in European Market
European blue-chip stocks known as the GRANOLAS group, which includes giants like GSK, Roche, and Nestlé, have quietly been making waves in the investment world. While not as glamorous as the tech behemoths in the Magnificent 7, the GRANOLAS have been steadily gaining ground. Over the past year, they accounted for a staggering 60% of all gains in the European market.
Comprising a quarter of the market capitalization of the pan-European Stoxx 600 index, the GRANOLAS have emerged as serious contenders in the investment landscape. In fact, from a global perspective, these stocks have outperformed the Magnificent 7 during the past two years, all while exhibiting half the volatility.
Investors have taken note of the GRANOLAS’ resilience and appealing characteristics. Currently trading at a premium 20 times price-to-earnings ratio, the group offers a compelling 30% discount compared to the Magnificent 7. Additionally, the GRANOLAS boast an average dividend yield of 2.5%, surpassing both the S&P 500’s average and the dividends offered by their tech counterparts.
So what sets the GRANOLAS apart? These stocks demonstrate strong earnings growth, low volatility, high and stable margins, and robust balance sheets. These qualities are highly sought-after in the current investment cycle. Moreover, the GRANOLAS may also reap the benefits of the ongoing shift towards passive investment and the limited liquidity in the European equity market, making them particularly attractive for those seeking a balanced portfolio.
While the tech titans may dominate headlines, it would be remiss to ignore the impressive performance and potential of the GRANOLAS group in the European investment landscape. With their solid track record and appealing attributes, these stocks deserve a place in every astute investor’s radar.
Analyst comment
Positive news. The GRANOLAS stocks have been outperforming the Magnificent 7 in the European market, accounting for 60% of all gains in the past year. They offer a compelling 30% discount compared to the Magnificent 7 and boast strong earnings growth, low volatility, high margins, and robust balance sheets. With their resilience and appealing characteristics, they are attractive for investors seeking a balanced portfolio. The market is expected to continue favoring the GRANOLAS stocks.
