Best European manufacturing stocks to invest in 2026

The European manufacturing sector continues to demonstrate resilience and innovation as companies adapt to evolving global supply chains and technological advancement. Are you looking for exposure to Europe's industrial backbone with strong operational excellence?

Hanza operates as a leading European manufacturing partner providing customized industrial solutions and advanced manufacturing services across multiple sectors and international markets. Prysmian specializes in cable manufacturing and energy infrastructure solutions, delivering critical components for telecommunications and power transmission systems globally. Alfa Laval develops sophisticated heat transfer, separation, and fluid handling technologies that serve essential industries including marine, energy, and food processing markets worldwide.

The European manufacturing sector offers compelling opportunities for investors seeking exposure to industrial innovation and operational excellence. These are among the best European manufacturing stocks for 2026.

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Before we dive into each company, let`s take a look at how your investment would have performed if you had invested in stocks mentioned in this article.

Now, let`s take a closer look at each of the companies:

  • Hanza (ST:HANZA)

    Hanza Holding AB is a leading Nordic manufacturing partner that provides comprehensive electronics manufacturing services and mechanical production solutions to technology companies across multiple industries including medtech, cleantech, and industrial automation. Founded in 2008 and headquartered in Stockholm, Sweden, the company has built a unique manufacturing ecosystem through strategic acquisitions and organic growth, creating a network of specialized production facilities across the Nordic region and Central Europe. Hanza has established itself as a preferred manufacturing partner for innovative companies by combining advanced manufacturing capabilities with supply chain optimization and engineering expertise.

    The company`s core operations encompass electronics manufacturing services (EMS), mechanical manufacturing, and integrated supply chain solutions delivered through a cluster-based production model that optimizes efficiency and reduces costs for customers. Hanza operates manufacturing facilities in Sweden, Finland, Estonia, Poland, and the Czech Republic, serving clients in high-growth sectors such as medical technology, clean energy, industrial automation, and telecommunications. With the continued trend toward manufacturing nearshoring, increasing demand for specialized production capabilities, and growing focus on supply chain resilience, Hanza is strategically positioned to capitalize on the evolving manufacturing landscape while helping Nordic companies maintain competitive advantages through local production expertise.

    Hanza financial statements

    Analysts recommendation: 2

    Financial Health

    • Return on assets (ROA): 4.68%
    • Return on equity (ROE): 12.54%
    • Return on investment (ROI): 10.6%

    Profitability

    • Gross margin: 43.8%
    • Operating margin: 8.26%
    • Net profit margin: 3.64%

    Growth

    • EPS (past 5 years): 22.9%
    • EPS (current): 4.44
    • EPS estimate (next quarter): 13.8
    • EPS growth (this year): 87.8%
    • EPS growth (next year): 18.4%
    • EPS growth (next 5 years): 16.8%
    • EPS growth (quarter-over-quarter): 31.2%
    • Sales growth (past 5 years): 28.4%
    • Sales growth (quarter-over-quarter): 26.8%

    💡 Why invest in Hanza?

    Like a skilled manufacturing orchestra conductor who harmonizes complex production processes across multiple locations, Hanza demonstrates compelling strengths that make it attractive in the specialized manufacturing services sector:

    • Cluster-Based Manufacturing Model: Hanza operates an innovative production cluster system that optimizes manufacturing efficiency, reduces logistics costs, and provides supply chain resilience through distributed facilities.
    • High-Growth Sector Focus: The company serves rapidly expanding industries including medtech, cleantech, and industrial automation, providing exposure to secular growth trends and premium pricing opportunities.
    • Nearshoring Trend Benefits: Hanza capitalizes on growing trend of companies moving production closer to end markets, offering Nordic customers local manufacturing alternatives with shorter lead times, improved supply chain reliability.
    • Strategic Acquisition Growth: The company has demonstrated successful acquisition integration capabilities, creating value through strategic purchases of complementary manufacturing businesses and expanding service offerings.

    🐌 Key considerations before investing in Hanza

    However, like navigating complex manufacturing ecosystems where operational challenges and market pressures create uncertainties, Hanza faces several risks that industrial manufacturing investors must carefully assess:

    • Customer Concentration Risk: The company`s revenue depends on relationships with key customers in specialized industries, creating vulnerability to contract losses, customer consolidation, or changes in strategies.
    • Cyclical Industry Exposure: Manufacturing services are subject to economic cycles and customer demand fluctuations, making revenue and profitability vulnerable to downturns in served industries and conditions.
    • Integration Execution Challenges: Continued growth through acquisitions requires successful integration of diverse manufacturing operations, cultures, and systems, with execution risks that could impact operational efficiency.
    • Cost Inflation Pressures: The company faces ongoing challenges from rising labor costs, energy prices, and raw material inflation that can pressure margins if not passed through to customers successfully through price adjustments.

    Final thoughts on Hanza

    Hanza`s cluster-based manufacturing model, high-growth sector focus, nearshoring trend benefits, and acquisition-driven expansion create compelling opportunities for investors seeking exposure to the evolving specialized manufacturing services market. However, the company`s customer concentration risks, cyclical industry exposure, integration challenges, and cost inflation pressures require careful evaluation of the operational complexities in manufacturing services investing. Like a versatile production partner who adapts to changing industrial needs, Hanza offers growth potential for investors who understand both the opportunities and challenges of the dynamic Nordic manufacturing landscape.

  • Prysmian (MI:PRY)

    Prysmian Group is Italy`s leading cable manufacturer and one of the world`s largest providers of cables and systems for energy, telecommunications, and defense infrastructure applications. Founded in 1879 and headquartered in Milan, Italy, the company has evolved into a comprehensive infrastructure solutions provider with cutting-edge capabilities in submarine cables, secure communications, and mission-critical defense connectivity. The company has demonstrated strong growth in defense-related projects, particularly benefiting from increased NATO infrastructure spending and military modernization programs across allied nations.

    The company`s defense portfolio encompasses secure communication cables for military installations, submarine cables for naval communications, and specialized cables for defense facilities and command centers. Prysmian supplies critical infrastructure to major defense programs including NATO communication networks, military base connectivity, and secure government communication systems used by defense forces. With rising global defense expenditure and increasing demand for secure communication infrastructure, Prysmian is strategically positioned to capitalize on defense modernization initiatives worldwide.

    Prysmian financial statements

    Analysts recommendation: 2

    Financial Health

    • Return on assets (ROA): 5.45%
    • Return on equity (ROE): 21.43%
    • Return on investment (ROI): 7.3%

    Profitability

    • Gross margin: 37.14%
    • Operating margin: 8.06%
    • Net profit margin: 6.03%

    Growth

    • EPS (past 5 years): 12.8%
    • EPS (current): 4.11
    • EPS estimate (next quarter): 3.1
    • EPS growth (this year): 26.1%
    • EPS growth (next year): 15.3%
    • EPS growth (next 5 years): 14.2%
    • EPS growth (quarter-over-quarter): 16.9%
    • Sales growth (past 5 years): 8.9%
    • Sales growth (quarter-over-quarter): 19.1%

    💡 Why invest in Prysmian?

    Like secure fiber optic networks that enable critical communications across vast operational theaters, Prysmian demonstrates compelling strengths for defense-focused investors seeking infrastructure exposure:

    • Critical Defense Infrastructure: Prysmian provides essential cable and connectivity solutions for military installations, command centers, and secure communication networks fundamental to defense operations worldwide.
    • Submarine Cable Dominance: Maintains global leadership in submarine cable systems including specialized military applications for secure underwater communications and strategic defense connectivity solutions worldwide.
    • NATO Infrastructure Provider: Serves defense customers across NATO allies and partner nations, benefiting from coordinated defense infrastructure investments, standardization initiatives, and multi-year military modernization programs.
    • Advanced Defense Communication: Develops cutting-edge cable technologies including cybersecure cables, ruggedized fiber optic systems, and high-speed military communications that command premium pricing and create competitive differentiation.

    🐌 Key considerations before investing in Prysmian

    However, like laying cables through contested territory where multiple threats can disrupt operations, Prysmian faces significant challenges that defense investors must evaluate:

    • Defense Budget Dependency: Defense-related revenue subject to government spending cycles, budget constraints, and changing military priorities that can impact project timing, contract values, and revenue stability.
    • Project Execution Risks: Defense cable projects involve complex engineering challenges, harsh operating environments, and strict security requirements that create execution risks and potential cost overruns in challenging conditions.
    • Technology Disruption Threats: Defense communications sector faces potential disruption from wireless technologies, satellite communications, and alternative connectivity solutions that could reduce traditional cable demand significantly.
    • Geopolitical Security Compliance: Defense projects involve sensitive locations and classified information, creating exposure to geopolitical tensions, security threats, and regulatory restrictions affecting operations and project execution.

    Final thoughts on Prysmian

    Prysmian`s critical defense infrastructure leadership, submarine cable dominance, NATO alliance positioning, and advanced communication systems create compelling opportunities for investors seeking exposure to essential defense connectivity solutions. However, defense budget dependency, project execution complexity, technology disruption risks, and geopolitical challenges warrant careful evaluation of specialized defense infrastructure dynamics. Like resilient communication networks that maintain connectivity under challenging conditions, Prysmian combines technical excellence with strategic positioning to deliver mission-critical infrastructure enabling modern defense operations and secure communications worldwide.

  • Alfa Laval (ST:ALFA)

    Alfa Laval is a global leader in heat transfer, separation, and fluid handling solutions, serving industries such as energy, food and beverage, and marine transportation. The company was founded in 1883 in Sweden by Gustaf de Laval and is headquartered in Lund. Over the years, Alfa Laval has expanded its presence worldwide, becoming a key player in industrial process optimization and energy efficiency.

    Alfa Laval`s core business revolves around providing equipment and solutions that enhance energy efficiency, reduce environmental impact, and improve productivity. Its products include heat exchangers, separators, and pumps used in industries ranging from renewable energy and oil refining to dairy and water treatment. With a strong focus on sustainability, the company continues to drive innovation in thermal and fluid technologies, supporting global efforts in energy transition and circular economy initiatives.

    Alfa Laval financial statements

    Analysts recommendation: N/A

    Financial Health

    • Return on assets (ROA): 7.88%
    • Return on equity (ROE): 20.37%
    • Return on investment (ROI): N/A

    Profitability

    • Gross margin: 36.37%
    • Operating margin: 17.37%
    • Net profit margin: 12.12%

    Growth

    • EPS (past 5 years): N/A
    • EPS (current): 20.16
    • EPS estimate (next quarter): N/A
    • EPS growth (this year): 16%
    • EPS growth (next year): N/A
    • EPS growth (next 5 years): N/A
    • EPS growth (quarter-over-quarter): N/A
    • Sales growth (past 5 years): N/A
    • Sales growth (quarter-over-quarter): 6.4%

    💡 Why invest in Alfa Laval?

    Alfa Laval offers several compelling reasons to consider investing:

    • Heat Transfer Leadership: As a global leader in heat transfer and fluid handling, Alfa Laval benefits from high demand across multiple industries, ensuring a steady revenue stream and strong competitive positioning worldwide.
    • Renewable Energy Growth: The company is expanding into hydrogen, biofuels, and other sustainable solutions, capitalizing on the shift toward cleaner energy and positioning itself advantageously for future growth opportunities.
    • Resilient Business Model: Serving diverse sectors like food, pharmaceuticals, and marine industries provides stability and reduces dependence on any single market, creating defensive characteristics and revenue diversification.
    • Focus on Innovation: Alfa Laval continually invests in R&D, leading to cutting-edge technologies that enhance efficiency and sustainability for industrial applications, maintaining competitive advantages and market leadership.

    🐌 Key considerations before investing in Alfa Laval

    However, prospective investors should weigh the following challenges:

    • Industrial Marine Cyclicality: The company`s revenue is partly tied to industrial and marine markets, making it susceptible to economic downturns, reduced capital expenditures, and customer inventory adjustments across key segments.
    • Raw Material Volatility: Fluctuations in steel, aluminum, and other input costs can pressure margins and affect profitability, requiring effective pricing strategies and cost management to maintain financial performance.
    • Supply Chain Risks: Disruptions in logistics, trade restrictions, or geopolitical instability could impact production and deliveries, creating operational challenges and potential revenue delays across global operations.
    • Industrial Solutions Competition: Alfa Laval faces strong competition from both established multinational companies and emerging players in industrial solutions, creating ongoing pressure on pricing, market share, and profitability.

    Final thoughts on Alfa Laval

    Alfa Laval stands out as a leading provider of industrial solutions with strong growth potential in the renewable energy and sustainability sectors. Its diverse customer base and focus on innovation provide resilience, while expansion into clean energy technologies enhances long-term prospects. However, exposure to cyclical industries and supply chain challenges remain risks that investors should consider before investing.

  • Legrand (PA:LR)

    Legrand is a global specialist in electrical and digital building infrastructure, providing solutions for power distribution, smart buildings, and data communication networks. The company was founded in 1865 in Limoges, France, and has grown into a leader in electrical components and smart home technologies. Legrand is known for its commitment to innovation, sustainability, and enhancing energy efficiency across residential, commercial, and industrial sectors.

    Legrand`s core business revolves around electrical wiring devices, lighting control, cable management, and connected home automation systems. The company develops cutting-edge solutions, including smart switches, energy-efficient circuit breakers, and advanced networking products that improve safety, efficiency, and user experience. With a strong global presence, Legrand continues to drive digital transformation in building infrastructure, integrating IoT and automation to create smarter and more sustainable environments.

    Legrand financial statements

    Analysts recommendation: N/A

    Financial Health

    • Return on assets (ROA): 6.94%
    • Return on equity (ROE): 17.51%
    • Return on investment (ROI): N/A

    Profitability

    • Gross margin: 51.14%
    • Operating margin: 18.27%
    • Net profit margin: 13.04%

    Growth

    • EPS (past 5 years): N/A
    • EPS (current): 4.63
    • EPS estimate (next quarter): N/A
    • EPS growth (this year): 2.6%
    • EPS growth (next year): N/A
    • EPS growth (next 5 years): N/A
    • EPS growth (quarter-over-quarter): N/A
    • Sales growth (past 5 years): N/A
    • Sales growth (quarter-over-quarter): 8.8%

    💡 Why invest in Legrand?

    Legrand offers several compelling reasons to consider investing:

    • Electrical Infrastructure Leadership: A globally recognized leader in electrical and digital infrastructure with a dominant position in multiple markets, benefiting from strong brand recognition and established customer relationships worldwide.
    • Smart Building Growth: Well-positioned to benefit from rising demand for home automation, energy efficiency, and connected devices, capitalizing on digital transformation trends in building infrastructure and IoT adoption.
    • Broad Market Coverage: Serves diverse end markets, including residential, commercial, and industrial sectors, reducing economic sensitivity and providing stable revenue streams across multiple geographic regions and applications.
    • Consistent Financial Performance: Generates strong cash flow and has a history of stable revenue growth supported by recurring demand for electrical solutions, maintaining healthy margins and shareholder returns consistently.

    🐌 Key considerations before investing in Legrand

    However, prospective investors should weigh the following challenges:

    • Construction Cycle Exposure: Demand for electrical products is tied to new construction and renovation activity, making it vulnerable to economic downturns, reduced capital expenditures, and housing market fluctuations.
    • Highly Competitive Industry: Faces strong competition from both global and regional players in the electrical and smart home sectors, creating ongoing pressure on pricing, market share, and profitability across product categories.
    • Global Trade Risks: Subject to global trade policies, evolving safety regulations, and potential disruptions in raw material supply, requiring effective risk management and operational flexibility across global operations.
    • Innovation Investment Costs: Continuous investments in innovation and expansion through acquisitions can pressure profit margins, requiring effective integration and return on investment to maintain financial performance.

    Final thoughts on Legrand

    Legrand is a market leader in electrical infrastructure and smart building solutions, benefiting from long-term trends in energy efficiency and automation. Its diversified product portfolio and global presence provide stability, though exposure to construction cycles and competition remain key challenges. For investors seeking a strong, innovation-driven company in the electrical sector, Legrand offers a compelling opportunity.