Insider Monkey
11 Most Profitable European Stocks
Ramish Cheema
9 min read

In This Article:

In this piece, we will take a look at the 11 most profitable European stocks. For more stocks, head on over to 5 Most Profitable European Stocks.

In today's highly divided and turbulent political and economic environment, if there's one thing that everyone can agree on, it's that 2022 was not a good year for Europe. Just as Europeans (and the world) were recovering from the pain of the coronavirus and the lockdowns, the brutal Russian invasion of Ukraine started. This invasion shocked the global energy market and it made for a rude awakening for Europe which had come to rely on easily accessible Russian gas and oil. As nations scuttered to diversify their energy supply chains, inflation surged across the European nations. In the Eurozone area, which does not include the United Kingdom, inflation from July to December was caused primarily by soaring energy prices. In fact, data from Eurostat shows that energy inflation peaked in October 2022, when prices grew by 4.4% - more than a full percentage higher than the next biggest item which was food (2.47%).

These top two contributors to inflation were because of the Russian invasion since both Russia and Ukraine are among the largest grain producers in the world. Data from the United States Department of Agriculture (USDA) shows that Ukraine was the world's fourth largest corn exporter and the fifth largest wheat exporter in April 2022 - only a couple of months after the Russian invasion. So naturally, a disruption in Ukraine creates a scarcity, which has been alleviated to an extent now after diplomatic efforts.

Europe's biggest economy, Germany, was the most impacted by the energy disruptions. The German economy, which is a European powerhouse and dominated by large automakers such as Bayerische Motoren Werke Aktiengesellschaft (OTCMKTS:BMWYY), was still stuttering to maintain growth as recently as December 2022. Data from the German federal statistics office showed that the December slowdown managed to surprise analysts. German industrial production dropped by 3.1% over the previous month, while analysts had expected it to slow down by 'only' 0.7%. Highlighting the addiction to Russian energy, the energy intensive sectors dropped by an even larger 6.1% in December. For the full year, the German industry slowed down by 5% over 2019 - the last 'normal' year the world has witnessed since the coronavirus pandemic broke out. Overall, the GDP grew by 1.9% in 2022, down from the 2.6% growth that was recorded in 2021.

Another European nation - and one that isn't part of the EU - that saw blistering inflation last year is the United Kingdom. The U.K.'s consumer price index (CPI) soared to 9.6% in October - the same year that the Eurozone as a whole also saw its prices peak. This shattered a three-decade old record for a country that had seen such high levels previously in November 2022 when the inflation sat at 9.2%. Once again, this was also fueled by high energy costs, since gas prices in Britain rose by an unbelievable 128.9% in December 2022 while electricity prices jumped by 65.4%. The U.K. was doubly hit, as a global economic slowdown and the strength of the U.S. dollar drove down the value of the British Pound. Since the country is a net importer, a cheaper pound makes imports more expensive, and further burdens an already troubled population.

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