We recently published a list of the 10 Most Profitable European Stocks to Invest In. In this article, we are going to take a look at where Banco Bilbao Vizcaya Argentaria, S.A. (NYSE:BBVA) stands against the other profitable European stocks.
How Could Trump’s Trade Tariffs Impact Europe?
After the U.S. Presidential elections, the global economies might face trade tariff tribulation as the Trump administration is expected to accelerate the trade war. China and Europe are especially expecting Trump’s potential trade policies that can heat the trade war. In addition, the rising perturbation around Germany’s upcoming snap election is a sign of worry for investors. Since the US elections, European stocks have retreated, outflows have increased, and the euro has slid against the U.S. dollar.
According to the European Central Bank’s chief economist, Philip Lane, if global trade feels more of a burden, the global economic output would suffer a sizable loss. “Trade fragmentation entails sizeable output losses,” said Lane, during a speech in Amsterdam. Lane anticipates a potential hit on the global output at between 2%, in case of partial trade restrictions, and almost 10% if a full ban is imposed.
Furthermore, the leading banks including JPMorgan, Goldman Sachs, and Citi have pointed out the euro as one of the most vulnerable currencies to Trump’s tariff agenda. Considering the region’s manufacturing exports and dependence on China, Europe could be exposed to trade tariff consequences.
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The United Kingdom’s inflation rate fell noticeably to 1.7% in September, just below the ECB’s 2% target for the first time since April 2021. On November 7, the Bank of England announced the rate cut by 25 basis points, bringing its key rate to 4.75%. The U.K.’s central bank has cut rates by a combined 75 basis points to 3.25% in 2024 so far. Investors expect the central bank to further cut rates during the next meeting in December.
Europe’s stock market has some interesting stocks that investors would want to keep in their portfolios to avoid too much concentration on U.S. assets. The pan-European STOXX Europe 600 has plunged nearly 2% since the U.S. elections, however, the index is up 11% over the last year, as of November 23.
With that, let’s take a look at how profitable Banco Bilbao Vizcaya Argentaria, S.A. (NYSE:BBVA) has been over the years.
Our Methodology
To compile our list of the 10 most profitable European stocks to invest in, we scanned European stocks through Finviz Screener using two indicators. We shortlisted the stocks with a minimum net income of $1 billion or more in the trailing twelve months (TTM) and with a 5-year net income compound annual growth rate (CAGR) of over 15%. From that list, we narrowed our choices to the 10 stocks that analysts see the most upside to. The list is ranked in ascending order of analysts’ average upside potential, as of November 22.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Banco Bilbao Vizcaya Argentaria, S.A. (NYSE:BBVA)
Upside Potential: 26.92%
5-Year Net Income CAGR: 15.33%
TTM Net Income: $9.29 Billion
Banco Bilbao Vizcaya Argentaria, S.A. (NYSE:BBVA) is a Spanish bank that is engaged in retail banking, wholesale banking, asset management, and private banking. The company has operations in the United Kingdom, the United States, Turkey, South America, and the rest of Eurasia.
In the third quarter of 2024, Banco Bilbao Vizcaya Argentaria, S.A. (NYSE:BBVA) yet again delivered strong results after a record Q2. In Q3, the company posted a net attributable profit of $2.63 billion, up by 26% year-over-year. The company continues to improve its metrics and has reached a record 20.1% in return on tangible equity in Q3. Spain and Mexico, two of the company’s major markets, are key to BBVA’s growth. The long-term profitability shows BBVA’s growth across different markets, especially Spain and Mexico.
Banco Bilbao Vizcaya Argentaria, S.A. (NYSE:BBVA) is optimistic to grow its loan book profitably and scale its operations considering the rise in consumer loans. The company’s major segments include consumers, cards, and Small and medium-sized enterprises (SMEs). As of September 2024, the company provided new loans to over 520,000 SMEs and 70,000 large corporations had access to BBVA’s financing. In addition to that, almost 115,000 families acquired homes via bank financing. The company has also allotted €16 billion to finance inclusive growth projects including the construction of hospitals or social housing.
Overall, BBVA ranks 6th on our list of most profitable European stocks to invest in. While we acknowledge the potential of BBVA as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BBVA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.