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High-Yield, Predictable Stocks in Fragile Europe
Posted by: Holly LaFon (IP Logged)
Date: October 7, 2013 04:50PM
A hedge fund manager who predicted and profited from the subprime crisis and the subsequent recovery in the U.S. is betting that the fragile Greece banking sector is on the verge of a rebound. John Paulson, founder of the $18 billion Paulson & Co., said in a statement:
"We think Piraeus (ATH:TPEIR) and Alpha (ATH:ALPHA), two banks we have a position in, are now very well capitalised and poised to recover.
"They have good management and we think the Greek economy is improving, which should benefit the banking sector."
For those not ready to stomach the risk involved in pursuing outsized returns in the world’s fifth most-indebted country alongside Paulson, stable, dividend-paying stocks abound elsewhere in Europe. The Business Predictability Screener shows that Germany, Switzerland, Austria and the Netherlands dominate the list when it comes to the most predictable, highest-yielding companies on the continent: Koninklijke KPN NV (FRA:KPN), Agrana Beteiligungs AG (FRA:AGB1), Novartis AG (FRA:NOTA) and Mayr-Melnhof Karton AG (FRA:MYM).
Koninklijke KPN NV (FRA:KPN)
KPN is an international telecommunications services company based in The Hague, Netherlands, and serving the Netherlands, Belgium and Germany. It controls more than 45% of the Netherlands’ market share in fixed telephony, 45% in mobile telephony and 41% in broadband.
Dividend yield: 4.35%
Dividend per share: €0.03
10-Year EBITDA Growth Rate: 6.2%
Business Predictability Ranking: 5 stars
The company’s first-half business operations results included an 8.1% year-over-year decline in revenue to €2.94 billion due to a challenging market. EBITDA declined 11% to €1.03 billion, and net profit fell 68% to €108 million.
KPN has a P/E of 6.38 and P/E/five-year EBITDA growth rate of 2.45.
Agrana Beteiligungs AG (FRA:AGB1)
Agrana is a Vienna-based producer of sugar, starch, processed fruit, fertilizer and ethanol fuel that primarily supplies the international food industry.
Dividend Yield: 2.94%
Dividend Per Share: €3.60
10-Year EBITDA Growth Rate: 12.3%
Business Predictability Ranking: 4.5 stars
In the year’s first half Agrana reported an increase in consolidated revenues to € 1.674 billion from €1.603 million in the same period the previous year. Operating results declined to €108 million compared to €142.5 million, primarily due to higher commodity prices for sugar and starch. The company is expecting a slight increase in full-year revenues compared to the previous year, driven by sales growth, with lower operating results than the previous two years.
Agrana has a P/E of 8.74 and P/E to five-year EBITDA growth rate of 0.31.
Novartis AG (FRA:NOTA)
Novartis is a Basel, Switzerland-based company that makes pharmaceuticals, eye care, generics, vaccines, consumer health products and diagnostic tools.
Dividend Yield: 2.27%
Dividend Per Share: CHF2.30 in 2012
10-Year EBITDA Growth Rate: 7.7%
Business Predictability Ranking: 4 stars
Novartis’ second half of the year showed a 2% increase in net sales to $28.04 billion and net income grew 1% to $4.97 billion. Growth across all divisions and a smaller impact from generic competition prompted the company to raise its guidance for the full-year 2013 to growth in the low single digits.
Novartis has a P/E ratio of 19.53 and P/E to five-year EBITDA growth rate of 3.83.
Mayr-Melnhof Karton AG (FRA:MYM)
Mayr-Melnhof Group is one of the world’s largest coated recycled cartonboard companies and operates two main divisions: MM Karton and MM Packaging. It is based in Vienna.
Dividend Yield: 2.08%
Dividend Per Share: €1.58
10-Year EBITDA Growth Rate: 2.5%
Business Predictability Rank: 5 stars
For the first half of the year Mayr-Melnhof Group’s profit grew 6% to EUR54.7 million and sales increased 0.7% to EUR981.8 million compared to the same period the previous year due to a continued economic slowdown and intensified competition.
Mayr-Melnhof has a P/E of 2.47 and P/E to five-year EBITDA growth rate of 2.47.
To see more high-predictability, high-dividend paying companies in Europe or elsewhere, try to the Predictable Companies Screener.
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Stocks Discussed: ATH:TPEIR, ATH:ALPHA, FRA:KPN, FRA:AGB1, FRA:NOTA, FRA:,