Finding Value In Europe

Includes: BUD, ETN, JCI, VGK
by: Brad Kenagy

This article will be about finding companies that are based in Europe and have large European exposure, but have growth, and stability potential. Recently on Jim Cramer's Mad Money, he said at the end of this video clip "I'm not recommending anything from Europe, nothing not bonds not stocks not currencies nothing." So I took that as a challenge to find some companies in Europe that have performed well so far this quarter. For my search I will be using the screener, to find companies that meet the following criteria:

To get my base list of companies I used the following 5 criteria below. After those 5 criteria were entered there were 80 companies that met the criteria.

Country: Europe

P/E: Profitable

Forward P/E: Profitable

Average Volume: Greater than 100K

Market Capitalization: Over $2 Billion

Next I added the criteria below to further the list down to include only companies that were growing earnings this year and next year, have a dividend to insulate from downturns, show a positive performance this quarter, and earnings growth is more in the future than in the past.

EPS Growth:

I include the below two criteria because I wanted companies that were growing earnings this year as well as in the future.

EPS Growth This Year: Positive

EPS Growth Next Year: Positive

Dividend Yield:

I included the dividend yield criteria because I wanted extra protection from the downturn that is going on in Europe.

Dividend Yield: Greater than 1%


I chose to include the performance Quarter Up because I wanted companies that still have a positive return for this quarter when the market has turned downward.

Performance Quarter: UP

Growth in Past vs. Future:

The below criteria is not one that can be entered on FinViz, but can easily visually simply by looking if the forward PE is less than the PE ratio. If the Forward PE ratio is less than the PE that means that the earnings growth estimates for in the future are greater than earnings growth in the past, and the opposite is true as well.

Forward PE: is less than P/E

Screen Results

After all the above screener criteria were entered there were 3 companies that met all the criteria. Below I will list the three companies with a short business description from Yahoo Finance for each, as well as a table showing the key screener criteria metric values, and also a chart comparing the three companies to the largest Europe Equities ETF which is the Vanguard MSCI Europe ETF (NYSEARCA:VGK).

Cooper Industries plc (CBE)

Cooper Industries plc manufactures and sells electrical components and tools in the United States and internationally. It operates in two segments, Energy and Safety Solutions, and Electrical Products Group.

Tyco International Ltd. (TYC)

Tyco International Ltd. provides security products and services, fire protection and detection products and services, valves and controls, and other industrial products worldwide. It operates through three segments: Tyco Security Solutions, Tyco Fire Protection, and Tyco Flow Control.

Anheuser-Busch InBev SA/NV (NYSE:BUD)

Anheuser-Busch InBev SA/NV, a brewing company, engages in the production, marketing, and distribution of beer in Latin America, North America, Europe, and the Asia pacific.

Data Table

EPS growth this year

EPS growth next year

Performance (Quarter)




Forward P/E

Dividend Yield


Cooper Industries plc








Tyco International Ltd.








Anheuser-Busch InBev








(Click to enlarge)

Closing Thoughts

The above data table shows that all three companies have strong earnings growth this year, and pretty good earnings growth next year. But in the current market environment what really sticks out to me is that all three companies offer a dividend yield greater than a 10 Year U.S Treasury bond, or the German 10 year Bund. In addition specifically Cooper Industries which is the target of a takeover offer from Eaton (NYSE:ETN), the offer for Cooper was $72/share but is currently trading at around $67.50, which is a $4.50/share discount to what Eaton offered, so there could be an additional opportunity if the share price of Cooper trends towards the $72/share offer.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.