Last Thursday, elections began for the European Parliament, which represents nearly 500 million citizens. The European Union has enjoyed a period of stability for some time now, following a period of unrest. However, there were apprehensions that the outcome of these elections would create disaffection against pro-EU governments and hold up economic austerity initiatives.
Austerity and Its Discontents
Several political parties have grown in strength, riding on the wave of discontent against issues seen to be emanating from the EU. This includes the series of austerity measures which several countries such as Greece have been forced to implement in return for assistance received from the currency union.
This has been accompanied by concerns regarding immigration, growing unemployment and a perceived loss of power to the EU. These factors have combined to provide strength to parties with an anti EU stance which have been labeled as euroskeptics.
EU Holds Strong
Anti EU groups have made significant gains in the elections. For instance, in the United Kingdom, an important party opposed to the EU received 28% of the votes. The right-wing National Front party, which has also opposed immigration got 25% of the French vote, compated to 6% in earlier elections.
In the end, the older pro-EU parties continued to hold the edge, garnering the majority of the seats in the European Parliament. Meanwhile, Petro Poroshenko has won the presidential elections in the Ukraine. Petroshenko is known to have a strong pro-EU stance.
Markets Gain from Results
Key indices in the regions gained from the results of elections in the European Parliament and Ukraine. France’s CAC 40 gained 0.8% while Spain’s IBEX moved up 1.2%. Germany’s DAX gained the most, increasing 1.3%. The euro also chalked up gains, following losses against the dollar made earlier.
Some analysts are of the opinion that the gains made by anti EU parties could actually be beneficial in the long run. The number of strictures created by the EU could be detrimental for the corporate sector and also affect markets. A reduction in red tape could be a welcome change for the bourses.
Below we present three European stocks which have a track record of consistent performance. Each of them also has a good Zacks Rank.
Unilever NV
Unilever NV (NYSE:UN) is a public limited company registered in The Netherlands with listings on stock exchanges in Amsterdam, Frankfurt, Zurich and New York (NYSE). It is a British-Dutch multinational corporation and its shares listed on the NYSE are known as New York Shares. Unilever is a leading manufacturer and marketer of consumer products in the world with significant presence across developed, developing and emerging markets.
Unilever NV holds a Zacks Rank #2 (Buy). The forward price-to-earnings ratio (P/E) for the current financial year (F1) is 19.74.
Lloyds Banking Group plc
Lloyds Banking Group plc (NYSE:LYG) is a United Kingdom-based financial services company, whose businesses provide a range of banking and financial services in the United Kingdom and a limited number of locations overseas. Headquartered in London, the company operates through four segments: Commercial Banking, Retail Banking, Insurance and Wealth, Asset Finance and International.
Currently, the company holds a Zacks Rank #2 (Buy) and a P/E (F1) of 10.32.
ICON Public Limited Company
ICON (NASDAQ:ICLR) is a global full service clinical research organization. The company provides contract clinical research services to the medical device, pharmaceutical and medical device industries worldwide. ICON purchased Aptiv Solutions in May 2014.
Apart from a Zacks Rank #1 (Strong Buy), ICON has a P/E (F1) of 17.27.
Despite challenges from protest parties the European Union holds strong. Election results in Ukraine have also added to optimism surrounding the Euro Zone. This is why these stocks would make good additions to any portfolio.