Strong earnings in Europe are leading to increases in dividend payouts and an uptick in M&A activity on the Continent. Global diversification is more important than ever. As always, investors should focus on harvesting dividends to create a portfolio that generates income for compounding, and funding retirement.
Nina Trentmann reports on Europe’s strong performance:
European companies have struck several deals since the beginning of the year, including Sanofi SA ’s SNY 0.48% proposed takeover of Bioverativ Inc. for more than $11.5 billion. Swiss industrial firm ABB Ltd. ABB -0.20% is on the hunt for mergers and acquisitions, said CEO Ulrich Spiesshofer during a Feb. 8 earnings call. Danish insulin maker Novo Nordisk A/S NVO 0.58% is scouting acquisitions in several markets including the U.S., outgoing CFO Jesper Brandgaard said in early February.
Deal making could also get a boost from low financing costs. Unibail-Rodamco SE, a Paris-based operator of luxury shopping malls, reported its cost of debt in 2017 fell to an “all-time low” of 1.4%. Unibail in December struck a deal to buy Australia’s Westfield Corp. for $16 billion.
Other companies are spending more cash on dividends. German sportswear maker Puma SE PUM +0.15% has proposed to pay a one-time dividend of €12.50 per share later this year. This comes after annual revenue exceeded €4 billion for the first time in the company’s history last year. L’Oréal plans to raise its dividend by 7.6% to €3.55, following sales growth across all of its divisions. Daimler AG DMLRY 0.04% also wants to boost its dividend, said Chairman Dieter Zetsche during the car maker’s most recent earnings call.
Read more here.
E.J. Smith - Your Survival Guy
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