In the current environment with continuous low interest rates (in the Euro zone interest rates will likely remain at 0% until 2025), but growing economic uncertainty due to the unresolved Brexit and the trade conflict between the US and China, capital markets remain volatile. In the current phase, we recommend to take a look at stocks from CEE, where many offer a combination of low P/Es, net cash and high dividend yields. Nowadays, such an attractive risk-return-profile is difficult to find in Western Europe and North America due to the excellent performance of the respective stock markets since 2009. Below are four companies from Emerging Europe, which are interesting in our view:
Stalexport S.A. / DYield 11.4% / Net gearing -28.6% / PE 2019E 6.5x
Krka d.d. / DYield 5.2% / Net gearing -12.3% / PE 2019E 9.4x
SNGN Romgaz SA / DYield 16.6% / Net gearing -12.2% / PE 2019E 9.1x
OMV Petrom SA / DYield 6.4% / Net gearing -13.9% / PE 2019E 7x