The European Equivalents: Unveiling the GRANOLAS
A tempest of influential stocks is brewing across the Atlantic, where European markets boast their own powerhouse ensemble. Enter the GRANOLAS – a moniker scribed by Goldman Sachs back in 2020 to baptize the formidable group comprising renowned names like GSK, Roche, ASML, Nestle, Novartis, Novo Nordisk, L’Oreal, LVMH, AstraZeneca, SAP, and Sanofi. Unlike their tech-laden U.S. counterparts, the GRANOLAS exhibit a marked penchant for healthcare and consumer discretionary stocks, forging a distinctive flair in the investment arena.
JPMorgan’s Lens on European Stocks
The shadow of the “Magnificent Seven” tech titans cast long across the financial landscape, their market weight sending ripples through global indices. As the giants of the U.S. domain flexed their prowess, investment behemoth JPMorgan stepped onto the European stage, illuminating a trio of top stock picks for discerning investors. Amidst a tapestry of options, JPMorgan singled out three energy stocks, each beckoning with dividends and potential for growth.
1. Energizing Potential: Eni S.P.A. (E)
JPMorgan’s spotlight first lands on Eni (E), a stalwart in the oil and gas domain since its inception in 1953. From its roots in Italy, Eni branched out globally to morph into a key player in the integrated energy realm. With operations spanning 62 countries, Eni commands a market cap of $54.9 billion.
Despite a 9.1% downtrend in YTD U.S.-traded shares, Eni emanates promise with a forward dividend yield of 6.75%, eclipsing the sector standard. Recent quarterly results, marked by a dip in EPS to $1.06, divulged a strategic uptick in hydrocarbon production levels, underscoring Eni’s operational resilience.
2. TotalEnergies Se (TTE): A Pillar of Strength
Founded in 1924, TotalEnergies (TTE) emerges as a stalwart among integrated energy conglomerates, flaunting a diversified portfolio across distinct segments. With a monumental market cap of $157.2 billion, TotalEnergies stands as a testament to endurance and adaptability.
Despite a 4.3% decline in YTD stock performance, TotalEnergies emanates stability, offering a forward dividend yield of 4.90%. Analysts foresee an EPS growth of 4% by 2025, showcasing the company’s potential for progression.
The Evolution of Royal Dutch Shell (SHEL)
Royal Dutch Shell (SHEL) emerges as a juggernaut, born from the fusion of Royal Dutch Petroleum Company and The “Shell” Transport and Trading Company in 1907. A titan in the oil realm, the $204.9 billion mammoth operates across upstream and downstream sectors, integrated gas, and renewables.
Weathering the Storm
Shell’s stock has faced a 2.5% decline YTD. But all is not lost – the resilient energy behemoth offers investors a hefty dividend yield of 4.38%, surpassing its sector peers. With a modest payout ratio of 15.5%, Shell stands poised to boost dividends in the days ahead.
Strategic Maneuvers
Despite a 20.1% slump in EPS for its latest quarter, Shell bested projections by a mile. Moreover, the corporation trimmed its net debts by 3% to $43.5 billion. A metamorphosis is underway as Shell divests itself of overseas holdings, shedding stakes in Malaysia, Indonesia, Aera Energy, and Nigerian onshore businesses.
The pivot towards the Garden Banks off the Gulf Coast of Louisiana, with the Sparta project, heralds Shell’s deep-water development saga. Boasting a projected output of 90Mboe/d and 244MMboe in recoverable resources, Sparta is set to churn out black gold by 2028 with an additional 500Mbbl/d in new production anticipated by 2025.
Analyst Prognostications
Market pundits foresee a 5% EPS upswing for Shell by 2025, with a forward P/E ratio of 7.7. The consensus outlook on Shell stock is overwhelmingly bullish, with a mean target price of $75.17, suggesting an enticing upward spiral of about 18%. Amongst the 11 analyst voices in the fray, 8 sing “Strong Buy,” while the remaining 3 hum “Hold”.
