Best european stocks to invest in 2025

European markets continue to demonstrate remarkable strength as companies adapt to evolving global dynamics and capitalize on emerging opportunities. The continent's most resilient companies offer investors exposure to diverse industries driving Europe's economic transformation across defense innovation, financial services, and advanced technology sectors.

Rheinmetall leads the European defense sector with its advanced military vehicles and weaponry, benefiting from rising defense budgets and strategic positioning. Norbit excels in advanced sensor technology and maritime solutions, driving innovation in critical infrastructure and security applications. Kongsberg specializes in missile systems and naval defense, securing major international contracts and expanding its global footprint.

With Europe's focus on strategic autonomy and technological sovereignty, these stocks represent exceptional growth potential across multiple sectors. As we progress through 2025, these European leaders offer both defensive stability and growth exposure for diversified portfolios with their strong market positions and expanding international presence.

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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 top 10 stocks mentioned in this article 5 years ago.

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

• Rheinmetall (DE:RHM)

  Rheinmetall AG is a German multinational defense and automotive technology company that has established itself as one of Europe's leading defense contractors and a key supplier of military systems to NATO allies worldwide. Founded in 1889 and headquartered in Düsseldorf, Germany, the company has evolved from a traditional munitions manufacturer into a comprehensive defense technology provider with expanding global operations. The company has demonstrated strong growth in defense contracts, particularly benefiting from increased European defense spending and military modernization programs following geopolitical tensions.

  The company's defense portfolio encompasses armored vehicle systems, main battle tanks, infantry fighting vehicles, air defense systems, ammunition, and advanced electronic warfare solutions for modern military operations. Rheinmetall supplies critical defense platforms including the Leopard 2 tank, Puma infantry fighting vehicle, and various air defense systems used by NATO forces and allied nations. With rising global defense expenditure and increasing demand for advanced military technologies, Rheinmetall is strategically positioned to capitalize on European defense modernization programs and the growing need for sophisticated defense systems in response to evolving security threats.

  Rheinmetall financial statements

  Analysts recommendation: 1.8

  Financial Health

  • Return on assets (ROA): 6.4%
  • Return on equity (ROE): 15.2%
  • Return on investment (ROI): 9.8%

  Profitability

  • Gross margin: 24.6%
  • Operating margin: 11.4%
  • Net profit margin: 7.9%

  Growth

  • EPS (past 5 years): 22.6%
  • EPS (current): 18.45
  • EPS estimate (next quarter): 20.2
  • EPS growth (this year): 35.8%
  • EPS growth (next year): 28.4%
  • EPS growth (next 5 years): 18.7%
  • EPS growth (quarter-over-quarter): 42.1%
  • Sales growth (past 5 years): 15.3%
  • Sales growth (quarter-over-quarter): 24.8%

  💡 Why invest in Rheinmetall?

  Like a precision-engineered armored vehicle that dominates the battlefield, Rheinmetall demonstrates several compelling strengths that make it an attractive investment in the expanding European defense sector.

  • European Defense Leadership: Rheinmetall ranks among Europe's top defense contractors with dominant market positions in armored vehicles, ammunition, and air defense systems, creating substantial competitive advantages and barriers to entry.
  • NATO Modernization Beneficiary: The company is perfectly positioned to benefit from NATO's commitment to increase defense spending to 2% of GDP and widespread military modernization programs across European allied nations.
  • Advanced Military Technologies: Rheinmetall develops cutting-edge defense technologies including next-generation combat vehicles, electronic warfare systems, and smart ammunition that command premium pricing and technology leadership.
  • Diversified Defense Portfolio: The company's comprehensive defense capabilities span land systems, air defense, ammunition, and automotive components, reducing dependence on single programs while creating cross-selling opportunities.

  🐌 Key considerations before investing in Rheinmetall

  However, like operating in contested territory where threats can emerge from multiple directions, Rheinmetall faces several significant challenges that defense investors must carefully evaluate.

  • Defense Budget Volatility: Heavy reliance on government defense spending makes the company vulnerable to budget cuts, political changes, and shifts in military priorities that could impact contract values and growth prospects.
  • Geopolitical Dependency: Rheinmetall's growth is closely tied to geopolitical tensions and conflicts, creating uncertainty as peace developments or changing threat perceptions could reduce defense demand.
  • Regulatory Export Restrictions: German export controls and EU regulations can limit international sales opportunities, particularly to certain regions, constraining growth potential in global defense markets.
  • Competitive Defense Market: The company faces intense competition from established defense contractors like BAE Systems, Lockheed Martin, and General Dynamics, pressuring margins and market share.

  Final thoughts on Rheinmetall

  Rheinmetall's leadership in European defense, strategic positioning within NATO modernization programs, and advanced military technologies create compelling opportunities for investors seeking exposure to the growing defense sector. However, the company's dependence on defense budgets, geopolitical factors, regulatory restrictions, and competitive pressures require careful evaluation of the complex dynamics in defense markets. Like a battle-tested commander who combines tactical expertise with strategic vision, Rheinmetall leverages its engineering excellence and market position to navigate the evolving defense landscape while delivering reliable performance for long-term investors.

• Norbit (OL:NORBT)

  Norbit ASA is a Norwegian technology company specializing in advanced sensor systems, underwater surveillance technologies, and defense solutions for maritime and military applications worldwide. Founded in 1995 and headquartered in Trondheim, Norway, the company has evolved from a small electronics firm into a leading provider of sophisticated defense and maritime technologies serving NATO allies and international customers. The company has demonstrated strong growth in defense contracts, particularly in underwater surveillance systems and maritime security solutions for naval forces.

  The company's defense portfolio encompasses advanced sonar systems for submarine detection, underwater surveillance technologies for naval operations, maritime security solutions for port protection, and specialized sensor systems for military applications. Norbit's products are integral to critical defense infrastructure including naval bases, underwater monitoring networks, and maritime border security systems used by allied forces. With increasing global focus on maritime security and underwater domain awareness, Norbit is strategically positioned to benefit from naval modernization programs and the growing need for advanced underwater surveillance capabilities in response to evolving maritime threats.

  Norbit financial statements

  Analysts recommendation: 2.1

  Financial Health

  • Return on assets (ROA): 8.4%
  • Return on equity (ROE): 16.8%
  • Return on investment (ROI): 11.2%

  Profitability

  • Gross margin: 42.3%
  • Operating margin: 18.7%
  • Net profit margin: 14.2%

  Growth

  • EPS (past 5 years): 24.8%
  • EPS (current): 12.85
  • EPS estimate (next quarter): 14.2
  • EPS growth (this year): 28.6%
  • EPS growth (next year): 22.4%
  • EPS growth (next 5 years): 19.3%
  • EPS growth (quarter-over-quarter): 31.7%
  • Sales growth (past 5 years): 18.9%
  • Sales growth (quarter-over-quarter): 26.4%

  💡 Why invest in Norbit?

  Like a sophisticated sonar system that detects threats beneath the surface, Norbit demonstrates several compelling strengths that make it an attractive investment in the specialized maritime defense sector.

  • Underwater Surveillance Leadership: Norbit leads in advanced sonar and underwater detection technologies for naval forces, creating specialized capabilities that are difficult to replicate and command premium pricing in defense markets.
  • Maritime Security Growth: The company benefits from increasing global focus on maritime security, underwater domain awareness, and naval modernization programs driven by evolving maritime threats and geopolitical tensions.
  • NATO Allied Customer Base: Norbit serves NATO allies and international naval forces with critical underwater surveillance systems, providing stable revenue streams and opportunities for long-term defense partnerships.
  • Specialized Technology Moat: The company's expertise in underwater acoustics, sensor fusion, and maritime surveillance creates significant barriers to entry and competitive advantages in niche defense applications.

  🐌 Key considerations before investing in Norbit

  However, like operating sensitive equipment in challenging underwater environments, Norbit faces several significant risks that maritime defense investors must carefully consider.

  • Defense Budget Dependency: Heavy reliance on naval defense spending makes the company vulnerable to military budget cuts, changing procurement priorities, and delays in maritime modernization programs.
  • Niche Market Limitations: Specialization in underwater surveillance creates market size constraints and limits growth opportunities compared to broader defense technology companies with diversified portfolios.
  • Technology Development Risk: Rapid advancement in underwater detection technologies and autonomous systems could disrupt traditional sonar markets, requiring continuous R&D investment with uncertain returns.
  • Small Company Scale: Limited resources compared to large defense contractors may constrain ability to compete for major programs and invest in next-generation technologies at required scale.

  Final thoughts on Norbit

  Norbit's leadership in underwater surveillance technologies, strategic positioning within maritime security growth, and specialized defense capabilities create compelling opportunities for investors seeking exposure to niche defense markets. However, the company's dependence on defense budgets, market size limitations, technology development risks, and scale constraints require careful evaluation of the specialized dynamics in maritime defense. Like a precision-calibrated depth sensor that provides critical intelligence in the ocean's depths, Norbit combines technical expertise with market focus to deliver specialized solutions while navigating the challenging currents of defense technology markets.

• Kongsberg (OL:KOG)

  Kongsberg Gruppen is a premier Norwegian defense and technology company specializing in advanced weapon systems, military electronics, and defense solutions for NATO allies and international defense customers worldwide. Founded in 1814 and headquartered in Kongsberg, Norway, the company has evolved from a traditional defense contractor into a global leader in missile systems, remote weapon stations, and advanced military technologies. The company has demonstrated strong growth in defense contracts, particularly benefiting from increased European defense spending and NATO modernization programs following heightened geopolitical tensions.

  The company's defense portfolio encompasses advanced missile systems including Naval Strike Missile (NSM) and Joint Strike Missile (JSM), remote weapon stations for military vehicles, air defense systems, and specialized defense electronics for military platforms. Kongsberg's products are integral to critical defense capabilities including anti-ship warfare, air defense networks, and vehicle protection systems used by NATO forces and allied nations. With rising global defense expenditure and increasing demand for advanced military technologies, Kongsberg is strategically positioned to capitalize on European defense modernization programs and the growing need for sophisticated weapon systems in response to evolving security threats across NATO's eastern flank and global hotspots.

  💡 Why invest in Kongsberg?

  Like a precision-guided missile that strikes its target with unerring accuracy, Kongsberg demonstrates several compelling strengths that make it an attractive investment in the expanding European defense sector.

  • NATO Defense Integration: Kongsberg's missile systems and remote weapon stations are deeply integrated into NATO defense infrastructure, creating long-term revenue streams through procurement programs and strategic partnerships.
  • European Defense Leadership: The company holds dominant market positions in anti-ship missiles, vehicle protection systems, and defense electronics across European markets, providing substantial competitive advantages.
  • Defense Spending Tailwinds: Kongsberg benefits from NATO's commitment to increase defense spending to 2% of GDP and widespread military modernization programs across European allied nations driven by tensions.
  • Advanced Military Technology: The company's expertise in precision strike capabilities, autonomous systems, and integrated defense solutions creates significant technological advantages and premium pricing power.

  🐌 Key considerations before investing in Kongsberg

  However, like operating advanced weapon systems in contested battlespaces where multiple threats can compromise mission success, Kongsberg faces several significant challenges that defense investors must carefully evaluate.

  • Defense Budget Volatility: Heavy reliance on European defense spending makes the company vulnerable to budget cuts, political changes, and shifts in military priorities that could impact contract values and growth.
  • Geopolitical Export Restrictions: As a defense contractor, Kongsberg faces strict export controls, arms transfer regulations, and potential sanctions that can limit international sales opportunities and create compliance challenges.
  • Defense Program Execution Risk: Complex military development programs and large-scale defense contracts face potential delays, cost overruns, and technical challenges that could impact profitability and ministry relationships.
  • Competitive Defense Market: Kongsberg faces intense competition from established defense contractors like Raytheon, MBDA, and Lockheed Martin, which have superior resources, global reach, and established relationships.

  Final thoughts on Kongsberg

  Kongsberg's leadership in European defense systems, strategic integration with NATO military capabilities, and advanced weapon technologies create compelling opportunities for investors seeking exposure to the growing European defense sector. However, the company's exposure to defense budget volatility, export restrictions, program execution risks, and competitive pressures require careful evaluation of the complex dynamics in defense markets. Like a battle-hardened commander who combines tactical precision with strategic vision, Kongsberg leverages its technological excellence and defense relationships to navigate geopolitical complexities while delivering mission-critical systems for allied forces worldwide.

• Rolls-Royce Holdings (L:RR)

  Rolls-Royce Holdings plc is a British multinational aerospace and defense company that designs, manufactures, and services power systems for aviation, naval, and land-based defense applications worldwide. Founded in 1906 and headquartered in London, the company has established itself as one of the world's leading providers of military engines, propulsion systems, and defense technologies for NATO allies and international defense customers. The company has demonstrated strong recovery and growth momentum following strategic restructuring, with expanding defense order books and increasing demand for military propulsion systems.

  The company's defense portfolio encompasses jet engines for military aircraft including the F-35 Lightning II, Eurofighter Typhoon, and various transport aircraft, as well as naval propulsion systems for submarines, destroyers, and aircraft carriers used by allied navies. Rolls-Royce also provides land-based power systems for military installations and specialized defense applications. With rising global defense expenditure and increasing demand for advanced military propulsion technologies, Rolls-Royce is strategically positioned to capitalize on military modernization programs and the growing need for next-generation defense systems across air, sea, and land domains.

  Rolls-Royce Holdings financial statements

  Analysts recommendation: 2.3

  Financial Health

  • Return on assets (ROA): 3.2%
  • Return on equity (ROE): 12.8%
  • Return on investment (ROI): 5.9%

  Profitability

  • Gross margin: 18.7%
  • Operating margin: 8.4%
  • Net profit margin: 4.1%

  Growth

  • EPS (past 5 years): -8.4%
  • EPS (current): 0.28
  • EPS estimate (next quarter): 0.32
  • EPS growth (this year): 78.9%
  • EPS growth (next year): 35.2%
  • EPS growth (next 5 years): 28.6%
  • EPS growth (quarter-over-quarter): 82.3%
  • Sales growth (past 5 years): 2.1%
  • Sales growth (quarter-over-quarter): 12.8%

  💡 Why invest in Rolls-Royce Holdings?

  Like a powerful turbine that generates thrust across multiple defense platforms, Rolls-Royce Holdings demonstrates several compelling strengths that make it an attractive investment in the global defense propulsion sector.

  • Defense Engine Dominance: Rolls-Royce powers critical military aircraft including the F-35, Eurofighter Typhoon, and C-130J, creating decades of predictable aftermarket revenue through maintenance and spare parts with substantial barriers to entry.
  • Multi-Domain Defense Portfolio: The company's defense capabilities span air, sea, and land, including jet engines, naval propulsion systems, and power generation, reducing reliance on a single program and enabling cross-selling opportunities.
  • Strategic Defense Partnerships: Rolls-Royce maintains long-term partnerships with major defense contractors like Lockheed Martin, BAE Systems, and Boeing, ensuring integration into next-generation platforms and early access to opportunities.
  • Advanced Propulsion Technology: The company leads in developing next-generation military propulsion including adaptive cycle engines and hybrid-electric systems, creating opportunities for premium pricing and technology leadership.

  🐌 Key considerations before investing in Rolls-Royce Holdings

  However, like navigating through turbulent airspace where multiple challenges can impact flight performance, Rolls-Royce Holdings faces several significant risks that defense investors must carefully assess.

  • Defense Program Concentration: Heavy dependence on major defense programs like the F-35 creates concentration risk, as delays, budget cuts, or cancellations could substantially impact revenue while military priority changes reduce demand.
  • Competitive Defense Market: Rolls-Royce faces intense competition from General Electric, Pratt & Whitney, and Safran, plus emerging technology companies developing alternative propulsion solutions that pressure margins.
  • Cyclical Recovery Execution: The company must continue executing its transformation strategy while managing challenges of returning to sustainable profitability following financial difficulties and restructuring efforts.
  • Technology Transition Risk: Rapid technological change toward electric propulsion and autonomous systems could disrupt traditional jet engine markets, requiring substantial investment with uncertain market demand.

  Final thoughts on Rolls-Royce Holdings

  Rolls-Royce Holdings' leadership in military propulsion systems, multi-domain defense portfolio, and strategic partnerships create compelling opportunities for investors seeking exposure to the growing global defense market. However, the company's program concentration risks, competitive pressures, execution challenges, and technology transition requirements demand careful evaluation of the complex dynamics in aerospace and defense markets. Like a skilled pilot who combines technical expertise with strategic navigation, Rolls-Royce leverages its engineering excellence and defense relationships to power through market turbulence while positioning for long-term success in the evolving defense landscape.

• Banco Sabadell (MC:SAB)

  Banco Sabadell is a Spanish banking group that provides a wide range of financial services, including retail banking, corporate banking, and asset management. Founded in 1881 in Sabadell, Spain, the bank has expanded both domestically and internationally, growing into one of Spain's largest financial institutions. Over the years, Banco Sabadell has focused on digital transformation and expanding its global footprint.

  The bank's core business includes personal and business banking, offering mortgages, loans, and investment solutions to individuals and enterprises. It also has a strong presence in corporate banking, catering to small and medium-sized businesses with specialized financial products. In recent years, Banco Sabadell has invested heavily in digital banking solutions to enhance customer experience and streamline operations, reinforcing its position as a key player in Spain's banking sector.

  💡 Why invest in Banco Sabadell?

  Banco Sabadell offers several compelling reasons to consider investing:

  • Strong SME Focus: A leading lender to small and medium-sized businesses in Spain, providing a stable source of revenue and market positioning.
  • International Presence: Ownership of TSB Bank in the UK diversifies its revenue streams and provides exposure to different financial markets.
  • Ongoing Digital Transformation: Significant investments in digital banking and fintech partnerships enhance operational efficiency and customer engagement.
  • Improving Financial Performance: Recent restructuring efforts and cost-cutting measures have strengthened profitability and balance sheet resilience.

  🐌 Key considerations before investing in Banco Sabadell

  However, prospective investors should weigh the following challenges:

  • Exposure to Economic Cycles: Heavily reliant on the Spanish and UK economies, making it vulnerable to macroeconomic downturns and interest rate fluctuations.
  • Competitive Banking Landscape: Faces strong competition from larger Spanish banks like Santander and BBVA, as well as emerging fintech firms.
  • UK Market Uncertainty: Its TSB Bank subsidiary has faced operational challenges, including IT system failures and regulatory scrutiny.
  • Regulatory and Interest Rate Risks: Subject to strict European banking regulations, which can impact profitability and lending flexibility.

  Final thoughts on Banco Sabadell

  Banco Sabadell is a key player in Spain's banking industry, with a strong focus on SMEs, digital banking, and international expansion. While ongoing restructuring efforts and digital investments are improving its competitive edge, challenges such as economic sensitivity, regulatory risks, and competition remain key considerations. Investors looking for exposure to the European banking sector should weigh these factors carefully.

• Banco BPM (MI:BAMI)

  Banco BPM is one of Italy's leading banking groups, offering a wide range of financial services, including retail banking, corporate banking, and asset management. The bank was formed in 2017 through the merger of Banco Popolare and Banca Popolare di Milano, two major Italian banks, with its headquarters located in Milan, Italy. Since its formation, Banco BPM has established itself as a key player in the Italian banking sector, with a strong emphasis on innovation and customer service.

  Banco BPM's core business revolves around providing traditional banking services such as personal and business loans, mortgages, and savings products. Additionally, the bank offers investment services and wealth management solutions to both individuals and institutions. With a significant presence in Italy, Banco BPM is committed to supporting the country's economic growth by facilitating access to financial resources for businesses and consumers alike. The bank continues to focus on enhancing its digital banking capabilities, expanding its customer base, and improving its service offerings across various financial sectors.

  💡 Why invest in Banco BPM?

  Banco BPM offers several compelling reasons to consider investing:

  • Strong Market Position in Italy: One of the largest banking groups in the country with a solid presence in northern Italy's industrial and business hubs.
  • Digital Transformation Strategy: Investments in digital banking and fintech partnerships are improving efficiency and customer engagement.
  • Growing Wealth Management Segment: Expansion in asset management and insurance services diversifies revenue sources.
  • Potential for M&A Opportunities: Frequently mentioned as a potential acquisition target, which could drive valuation growth.

  🐌 Key considerations before investing in Banco BPM

  However, prospective investors should weigh the following challenges:

  • Exposure to Italian Economic Conditions: Heavily reliant on the domestic economy, making it vulnerable to Italy's financial and political fluctuations.
  • High Non-Performing Loans (NPLs): Although improving, the bank still has a significant level of bad loans compared to European peers.
  • Competitive Banking Landscape: Faces intense competition from both traditional banks and digital challengers in Italy's banking sector.
  • Regulatory Risks: Subject to strict European Central Bank (ECB) and Italian regulatory oversight, which can impact strategic flexibility.

  Final thoughts on Banco BPM

  Banco BPM is a key player in Italy's banking sector, benefiting from a strong domestic presence, digital innovation, and a diversified financial services portfolio. While its focus on wealth management and digital banking is promising, risks related to the Italian economy, regulatory oversight, and non-performing loans remain concerns. Investors seeking exposure to the Italian banking industry may find Banco BPM attractive, but they should weigh its opportunities against the sector's challenges.

• UniCredit (MI:UCG)

  UniCredit Commercial Bank is a leading European financial institution providing banking and financial services to individuals, businesses, and corporations. Founded in 1998 through the merger of several Italian banks, UniCredit is headquartered in Milan, Italy. With a strong presence in over a dozen countries, the bank plays a crucial role in the European financial sector, offering a wide range of services tailored to diverse customer needs.

  The bank's core business focuses on retail and corporate banking, investment banking, asset management, and financial advisory services. UniCredit serves millions of clients across Europe, offering loans, credit services, payment solutions, and wealth management. With a strong emphasis on digital transformation and sustainability, UniCredit continues to expand its financial solutions while maintaining a solid risk management framework to support economic growth and stability.

  💡 Why invest in UniCredit?

  UniCredit offers several compelling reasons to consider investing:

  • Strong European Presence: One of the largest banks in Europe with a significant footprint across Italy, Germany, and Central and Eastern Europe.
  • Solid Financial Performance: Recent restructuring efforts have improved profitability, capital ratios, and operational efficiency.
  • Dividend Potential: A well-capitalized balance sheet allows the bank to return capital to shareholders through dividends and share buybacks.
  • Digital Transformation: Investments in fintech and digital banking services enhance customer experience and drive cost efficiencies.

  🐌 Key considerations before investing in UniCredit

  However, prospective investors should weigh the following challenges:

  • Economic Sensitivity: Exposure to European economies makes the bank vulnerable to financial downturns and interest rate fluctuations.
  • Regulatory Challenges: Stricter banking regulations in the EU could impact profitability and capital requirements.
  • Credit Risk Exposure: A large loan portfolio, including corporate and sovereign debt, presents potential default risks during economic slowdowns.
  • Competitive Banking Sector: Faces strong competition from both traditional banks and emerging fintech companies, affecting market share growth.

  Final thoughts on UniCredit

  UniCredit is a major player in the European banking sector, benefiting from a strong regional presence, improved financial performance, and digital innovation. However, regulatory challenges, credit risks, and economic fluctuations pose potential risks for investors. Those considering UniCredit should weigh its growth potential against the inherent volatility of the banking industry.

• Leonardo DRS (MI:LDO)

  Leonardo DRS is a premier U.S.-based defense contractor specializing in advanced military technology solutions, sensor systems, and electronic warfare capabilities for the U.S. Department of Defense and allied nations worldwide. Founded in 1969 and headquartered in Arlington, Virginia, the company operates as a subsidiary of Italian aerospace and defense giant Leonardo S.p.A., combining global expertise with specialized U.S. defense market knowledge. The company has demonstrated strong growth in defense contracts, particularly benefiting from increased U.S. defense spending and military modernization programs following heightened geopolitical tensions and evolving security threats across multiple theaters.

  The company's core business revolves around mission-critical defense technologies including advanced sensor systems, electronic warfare solutions, intelligence and surveillance systems, and power and propulsion technologies for military platforms. Leonardo DRS specializes in infrared imaging systems, naval combat systems, ground vehicle electronics, and next-generation military communication technologies that enhance battlefield awareness and operational effectiveness. With rising global defense expenditure and increasing demand for sophisticated military technologies, Leonardo DRS is strategically positioned to capitalize on U.S. defense modernization programs and the growing need for advanced sensor and electronic warfare capabilities in response to evolving threats from near-peer adversaries and asymmetric warfare challenges.

  Leonardo DRS financial statements

  Analysts recommendation: 1.78

  Financial Health

  • Return on assets (ROA): 5.94%
  • Return on equity (ROE): 9.5%
  • Return on investment (ROI): 7.88%

  Profitability

  • Gross margin: 22.18%
  • Operating margin: 9.45%
  • Net profit margin: 7%

  Growth

  • EPS (past 5 years): 9%
  • EPS (current): 0.87
  • EPS estimate (next quarter): 0.22
  • EPS growth (this year): 15.73%
  • EPS growth (next year): 16.05%
  • EPS growth (next 5 years): 13.87%
  • EPS growth (quarter-over-quarter): 70.64%
  • Sales growth (past 5 years): 3.78%
  • Sales growth (quarter-over-quarter): 16.13%

  💡 Why invest in Leonardo DRS?

  Like advanced military sensors that provide critical battlefield intelligence, Leonardo DRS demonstrates several compelling strengths that make it an attractive investment in the U.S. defense technology sector.

  • Defense Technology Leadership: Leonardo DRS holds dominant market positions in sensor systems, electronic warfare, and naval combat technologies, creating substantial competitive advantages and high barriers to entry for competitors.
  • U.S. Defense Contract Integration: The company maintains deep integration with U.S. Department of Defense programs and allied military systems, creating predictable revenue streams and long-term strategic partnerships with government customers.
  • Advanced Military Innovation: Leonardo DRS invests heavily in cutting-edge technologies including hypersonic systems, electro-optical sensors, and next-generation electronic warfare capabilities that maintain technological leadership.
  • Defense Spending Beneficiary: The company benefits from increased U.S. defense budgets, military modernization programs, and growing demand for advanced sensor technologies driven by near-peer competition and evolving threats.

  🐌 Key considerations before investing in Leonardo DRS

  However, like operating sophisticated defense systems in contested environments where budget constraints can limit capabilities, Leonardo DRS faces several significant challenges that defense investors must evaluate.

  • Defense Budget Dependency: Heavy reliance on U.S. defense spending makes the company vulnerable to budget cuts, political changes, and shifts in military priorities that could impact contract values and revenue stability.
  • Competitive Defense Market: Leonardo DRS faces intense competition from established defense contractors like Raytheon, Lockheed Martin, and Northrop Grumman, which have superior resources and broader defense portfolios.
  • Technology Disruption Risk: Rapid advancement in defense technologies and emerging competitors could challenge the company's market position in sensor systems and electronic warfare capabilities.
  • Geopolitical Supply Chain Risk: As a subsidiary of Italian Leonardo S.p.A., the company faces potential supply chain disruptions, export restrictions, and geopolitical tensions that could impact operations and growth.

  Final thoughts on Leonardo DRS

  Leonardo DRS's leadership in defense sensor technologies, strategic integration with U.S. military programs, advanced innovation capabilities, and defense spending tailwinds create compelling opportunities for investors seeking exposure to the U.S. defense technology sector. However, the company's exposure to defense budget volatility, competitive pressures, technology disruption risks, and geopolitical supply chain challenges require careful evaluation of the complex dynamics in defense markets. Like a sophisticated targeting system that combines precision sensors with strategic intelligence, Leonardo DRS leverages technological excellence with defense market positioning to navigate competitive challenges while delivering mission-critical capabilities for U.S. military forces and allied defense customers worldwide.

• Hensoldt (DE:HAG)

  Hensoldt is a premier German defense technology company specializing in advanced sensor solutions, radar systems, and electronic warfare technologies for NATO allies and international defense customers worldwide. Founded in 2017 as a spin-off from Airbus Defence and Space and headquartered in Taufkirchen, Germany, the company has rapidly established itself as a leading provider of mission-critical surveillance and reconnaissance systems for military applications. The company has demonstrated strong growth in defense contracts, particularly benefiting from increased European defense spending and NATO modernization programs following heightened geopolitical tensions and security concerns across Europe.

  The company's core business revolves around high-performance radar, optronics, avionics, and electronic warfare systems that provide critical capabilities for fighter aircraft, naval vessels, and ground-based defense platforms. Hensoldt's advanced sensor technologies enhance situational awareness, threat detection, and electronic countermeasures for military forces while also investing heavily in cybersecurity and AI-driven defense solutions. With rising global defense expenditure and increasing demand for sophisticated sensor technologies, Hensoldt is strategically positioned to capitalize on European defense modernization programs and the growing need for advanced surveillance capabilities in response to evolving security threats across NATO's eastern and northern flanks.

  💡 Why invest in Hensoldt?

  Like precision radar systems that detect threats beyond the horizon, Hensoldt demonstrates several compelling strengths that make it an attractive investment in the expanding European defense technology sector.

  • European Defense Leadership: Hensoldt holds dominant market positions in sensor solutions, radar systems, and electronic warfare across European defense markets, creating substantial competitive advantages and high barriers to entry.
  • NATO Modernization Beneficiary: The company benefits from NATO's commitment to increase defense spending to 2% of GDP and widespread military modernization programs across European allied nations driven by geopolitical tensions.
  • Advanced Sensor Technology: Hensoldt's expertise in cutting-edge radar, optronics, and electronic warfare systems creates significant technological advantages and premium pricing power in specialized defense applications.
  • Strategic Defense Partnerships: The company maintains long-term contracts with major defense contractors and government agencies, creating predictable revenue streams and deep integration with critical military programs.

  🐌 Key considerations before investing in Hensoldt

  However, like operating sophisticated radar systems in contested environments where electronic jamming can compromise detection capabilities, Hensoldt faces several significant challenges that defense investors must evaluate.

  • Defense Budget Dependency: Heavy reliance on European defense contracts makes the company vulnerable to budget cuts, political changes, and shifts in military priorities that could impact revenue stability and growth prospects.
  • Geopolitical Export Restrictions: As a German defense contractor, Hensoldt faces strict export controls, arms transfer regulations, and potential political restrictions that can limit international sales opportunities.
  • Competitive Defense Market: Hensoldt faces intense competition from established defense contractors like Thales, Leonardo, and Raytheon, which have superior resources, global reach, and established military relationships.
  • Market Volatility Risk: As a relatively new publicly traded company, Hensoldt's stock experiences significant volatility driven by defense sector fluctuations, investor sentiment, and earnings performance expectations.

  Final thoughts on Hensoldt

  Hensoldt's leadership in European sensor technologies, strategic positioning within NATO defense frameworks, and advanced radar capabilities create compelling opportunities for investors seeking exposure to the growing defense technology sector. However, the company's exposure to defense budget volatility, export restrictions, competitive pressures, and market volatility require careful evaluation of the specialized dynamics in defense markets. Like a sophisticated early warning system that provides critical intelligence in complex threat environments, Hensoldt combines technological excellence with strategic positioning to navigate competitive challenges while delivering mission-critical sensor solutions for NATO allies and defense customers worldwide.

• Saab (ST:SAAB-B)

  Saab AB is a premier Swedish defense and aerospace company specializing in advanced fighter aircraft, naval systems, and electronic warfare technologies for NATO allies and international defense customers worldwide. Founded in 1937 and headquartered in Stockholm, Sweden, the company has evolved from an aircraft manufacturer into a comprehensive defense technology provider with cutting-edge capabilities in military aviation, submarine systems, and radar technologies. The company has demonstrated strong growth in defense contracts, particularly benefiting from increased European defense spending and NATO modernization programs following heightened geopolitical tensions in Northern Europe and the Baltic region.

  The company's core business revolves around the Gripen fighter aircraft, advanced radar and sensor systems, submarine technologies, missile systems, and integrated command and control solutions for military operations. Saab's products are integral to critical defense capabilities including air defense networks, electronic warfare, maritime security, and battlefield management systems used by NATO forces and allied nations. With rising global defense expenditure and increasing demand for advanced military technologies, Saab is strategically positioned to capitalize on European defense modernization programs and the growing need for sophisticated defense systems in response to evolving security threats across NATO's northern and eastern flanks.

  💡 Why invest in Saab?

  Like a precision-engineered Gripen fighter aircraft that combines agility with advanced capabilities, Saab demonstrates several compelling strengths that make it an attractive investment in the expanding European defense sector.

  • Nordic Defense Leadership: Saab holds dominant market positions in fighter aircraft, radar systems, and electronic warfare across Northern European defense markets, creating substantial competitive advantages and high barriers to entry.
  • Defense Technology Innovation: The company invests approximately 25% of annual revenue into defense R&D, developing next-generation military technologies in electronic warfare, autonomous systems, and stealth capabilities.
  • NATO Modernization Beneficiary: Saab benefits from NATO's commitment to increase defense spending to 2% of GDP and widespread military modernization programs across European allied nations driven by geopolitical tensions.
  • Defense Export Strategy: The company has successfully expanded its global defense footprint beyond Europe with strategic military partnerships in Asia, Middle East, and the Americas, creating diversified revenue streams.

  🐌 Key considerations before investing in Saab

  However, like navigating a fighter jet through hostile airspace where multiple threats can compromise mission success, Saab faces several significant challenges that defense investors must carefully evaluate.

  • Defense Budget Volatility: Heavy reliance on European defense spending makes the company vulnerable to budget cuts, political changes, and shifts in military priorities that could impact contract values and growth prospects.
  • Competitive Defense Market: Saab faces intense competition from larger defense contractors like Lockheed Martin, BAE Systems, and Thales, which have superior resources, global reach, and established military relationships.
  • Defense Export Restrictions: As a Swedish defense contractor, Saab faces strict export controls, arms transfer regulations, and potential political restrictions that can limit international sales opportunities.
  • Complex Program Execution: Major defense development programs like fighter aircraft and submarine systems involve significant technical challenges, potential delays, and cost overruns that could impact profitability.

  Final thoughts on Saab

  Saab's leadership in Nordic defense systems, technological innovation in military capabilities, and strategic positioning within European security frameworks create compelling opportunities for investors seeking exposure to the growing defense technology sector. However, the company's exposure to defense budget volatility, competitive pressures, export restrictions, and complex program execution risks require careful evaluation of the specialized dynamics in defense markets. Like a sophisticated radar system that detects threats beyond the horizon, Saab combines technological excellence with strategic vision to navigate geopolitical complexities while delivering advanced defense solutions for NATO allies and partner nations worldwide.

• Bilfinger (DE:GBF)

  Bilfinger SE is a global industrial services provider that specializes in enhancing efficiency, reliability, and sustainability for clients in sectors such as energy, chemicals, and pharmaceuticals. Founded in 1880 and headquartered in Mannheim, Germany, the company delivers a wide range of engineering, maintenance, and project management services. It has grown into a major player supporting critical infrastructure and operations across Europe, North America, and the Middle East.

  Bilfinger's core business is organized into two main segments: Engineering & Maintenance (E&M) and Technologies. The E&M division focuses on maintaining and improving the operational efficiency of industrial plants, while the Technologies unit offers tailored solutions for process plant construction, modernization, and environmental compliance. With increasing attention to digital tools and decarbonization strategies, the company is positioning itself as a partner of choice for clients navigating the energy transition and industrial transformation.

  💡 Why invest in Bilfinger?

  Bilfinger offers several compelling reasons to consider investing:

  • Stable Recurring Revenue: The company benefits from a stable stream of recurring revenue thanks to long-term service and maintenance contracts in essential industries.
  • Energy Transition Exposure: Bilfinger is increasingly exposed to the energy transition space, particularly through projects related to carbon reduction, hydrogen infrastructure, and renewables.
  • Strong Financial Health: It maintains a strong balance sheet with healthy cash flow, enabling consistent dividends and share buybacks that reward long-term investors.
  • Operational Efficiency: The company's restructuring efforts and strategic realignment have improved operational efficiency and boosted margins in recent years.

  🐌 Key considerations before investing in Bilfinger

  However, prospective investors should weigh the following challenges:

  • Cyclical Demand: Demand for its services remains closely tied to the health of the broader industrial and energy markets, which can be cyclical.
  • Limited Growth Potential: Growth potential may appear limited compared to high-tech or fast-scaling industrial firms, making it less appealing for aggressive growth investors.
  • Rising Costs: Rising labor and material costs in Europe can pressure profit margins and delay project timelines in its core markets.
  • Investor Caution: Despite improvements, Bilfinger still carries some investor caution due to past governance and financial underperformance.

  Final thoughts on Bilfinger

  Bilfinger SE presents a stable, value-oriented opportunity within the industrial services sector, with growing relevance in the energy transition. Its combination of recurring income, improving margins, and involvement in decarbonization trends supports a long-term investment case. While it lacks rapid growth, its steady fundamentals and strategic focus make it a solid pick for income and infrastructure-focused portfolios.

• Commerzbank (DE:CBK)

  Commerzbank AG is a leading German financial institution that provides banking and financial services to corporate, institutional, and private clients. The bank was founded in 1870 in Hamburg, Germany, and is currently headquartered in Frankfurt. With a strong presence in Europe and international markets, Commerzbank plays a crucial role in financing trade and industry.

  The core business of Commerzbank focuses on corporate and investment banking, with a particular emphasis on serving small and medium-sized enterprises (SMEs). It offers a wide range of financial products, including loans, asset management, and risk management solutions. Additionally, the bank operates in retail banking, providing personal banking services such as savings accounts, mortgages, and digital banking solutions. Commerzbank is also actively investing in digital transformation to enhance efficiency and customer experience in an evolving financial landscape.

  💡 Why invest in Commerzbank?

  Commerzbank offers several compelling reasons to consider investing:

  • Strong SME Focus: A leading lender to small and medium-sized enterprises, a key driver of Germany's economy, ensuring a stable customer base.
  • Strategic Digital Transformation: Investments in digital banking and automation are improving efficiency and enhancing customer experience.
  • Restructuring Efforts Boosting Profitability: Recent cost-cutting measures and business realignments have strengthened financial performance and increased operational efficiency.
  • Strong Presence in European Banking: Commerzbank benefits from its established position in Germany and other European markets, providing a solid foundation for growth.

  🐌 Key considerations before investing in Commerzbank

  However, prospective investors should weigh the following challenges:

  • Exposure to Economic Cycles: Heavily reliant on the German and European economies, making it vulnerable to economic downturns and interest rate fluctuations.
  • Intense Competition: Faces stiff competition from both traditional banks and emerging fintech firms, which could pressure profit margins.
  • Past Financial Struggles: The bank has experienced financial difficulties in the past, including low profitability and restructuring challenges, impacting investor confidence.
  • Regulatory and Compliance Risks: As a major financial institution, Commerzbank must navigate strict European banking regulations, which could impact operations and profitability.

  Final thoughts on Commerzbank

  Commerzbank AG remains a key player in European banking, benefiting from its strong SME lending, digital transformation, and restructuring efforts. While its market position is solid, challenges such as economic sensitivity, competition, and regulatory risks must be considered. Investors looking for exposure to European banking should weigh these factors before making an investment decision.

• BPER Banca (MI:BPE)

  BPER Banca is an Italian banking group that provides retail and corporate banking, wealth management, and financial services. Founded in 1867 in Modena, Italy, it has grown into one of the country's largest banking institutions, expanding through acquisitions and strategic partnerships. The bank operates a vast network of branches across Italy, serving individuals, businesses, and institutions.

  BPER Banca's core business focuses on traditional banking services, including savings accounts, loans, mortgages, and investment products. It also offers specialized financial solutions such as insurance, asset management, and digital banking. The bank has been actively modernizing its operations, enhancing its digital services, and expanding its corporate lending activities to support Italy's economic growth.

  💡 Why invest in BPER Banca?

  BPER Banca offers several compelling reasons to consider investing:

  • Strong Domestic Presence: One of Italy's largest banks with an extensive branch network and a solid customer base.
  • Strategic Acquisitions: Growth has been driven by well-executed mergers and acquisitions, strengthening market share.
  • Improved Profitability: Recent cost-cutting initiatives and efficiency improvements have enhanced financial performance.
  • Dividend Potential: Aiming to maintain and grow shareholder returns through dividends as profitability improves.

  🐌 Key considerations before investing in BPER Banca

  However, prospective investors should weigh the following challenges:

  • Italy-Focused Operations: Heavily reliant on the Italian economy, making it vulnerable to domestic financial instability.
  • High Competition: Faces intense competition from larger Italian and European banks, as well as digital-first financial services.
  • Exposure to Non-Performing Loans: Like many Italian banks, it has had to manage a legacy of non-performing loans, affecting financial stability.
  • Regulatory Risks: Subject to strict banking regulations in Italy and the European Union, which may impact future profitability.

  Final thoughts on BPER Banca

  BPER Banca is a well-established player in the Italian banking sector, benefiting from a strong domestic presence and strategic growth through acquisitions. While competition, regulatory challenges, and economic dependence on Italy present risks, its focus on digital transformation and improving financial performance make it an interesting choice for investors. Those seeking exposure to the Italian banking industry with a growing institution may find BPER Banca a compelling option.

• Royal BAM Group (AS:BAMNB)

  Royal BAM Group nv is a Dutch construction-services business headquartered in Bunnik, Netherlands, active in building, civil engineering, property development, and public-private partnership projects worldwide. Founded in 1869 in Groot-Ammers, the company has grown into the largest construction firm in the Netherlands and a top-ten player in Europe. In fiscal 2024, BAM delivered adjusted EBITDA of €333 million on revenues of €6.46 billion, with its order book rising 33% to €13 billion, underpinning strong medium-term visibility.

  Royal BAM's operations are organized into four segments: Construction & Mechanical and Electrical Services, focusing on residential and non-residential buildings; Civil Engineering, delivering tailored infrastructure works; Property, developing housing projects; and PPP & Concessions, managing roads, rail, healthcare, and public facilities under long-term contracts. The group also holds strategic stakes in Hochtief and Abertis, enhancing its global footprint in infrastructure and transport concessions. With a growing emphasis on sustainability and digitalization, BAM aims to execute complex projects efficiently while reducing carbon emissions and optimizing resource use.

  💡 Why invest in Royal BAM Group?

  Royal BAM Group nv offers several compelling reasons to consider investing:

  • Backlog Visibility: A record order book of €13 billion entering 2025 provides clear revenue visibility and underpins medium-term growth expectations.
  • Robust 2024 Financial Performance: Delivering double-digit order book growth alongside a 5.2% adjusted EBITDA margin demonstrates strong operational execution.
  • Global Diversification: Operations across Europe, North America, the Middle East, and Australia reduce reliance on any single market and capture varied growth opportunities.
  • Sustainability Leadership: Six consecutive CDP Climate A ratings and SBTi-validated net-zero ambitions highlight BAM's commitment to green construction practices.

  🐌 Key considerations before investing in Royal BAM Group

  However, prospective investors should weigh the following challenges:

  • Cyclical Industry Dynamics: Construction and infrastructure services are highly sensitive to economic cycles and public investment trends.
  • Leverage Levels: Total assets of €3.89 billion against equity of €0.90 billion result in a solvency ratio of 23%, which could constrain flexibility if financing costs rise.
  • Integration and Stake Management: Coordinating subsidiaries like Hochtief and managing Abertis investments add execution complexity and potential cultural misalignment.
  • Regulatory and Political Exposure: Large public-private partnership projects require government approvals and are vulnerable to policy shifts, permitting delays, and compliance hurdles.

  Final thoughts on Royal BAM Group

  Royal BAM Group nv stands out as a resilient infrastructure leader with strong 2024 financial performance, extensive backlog visibility, and a diversified global presence. Its strategic stakes and sustainability credentials enhance long-term cash-flow potential. Nevertheless, investors should carefully consider the sector's cyclicality, capital structure implications, integration risks, and regulatory dependencies when evaluating BAM for a long-term portfolio.

• Indra Sistemas (MC:IDR)

  Indra Sistemas is Spain's leading defense technology company specializing in advanced military systems, air traffic management, and digital transformation solutions for NATO allies and global defense markets. Founded in 1921 and headquartered in Alcobendas, Madrid, the company has evolved into Europe's premier defense contractor with cutting-edge capabilities in combat systems, radar technology, and mission-critical infrastructure. The company has demonstrated exceptional growth in defense contracts, particularly benefiting from increased European defense spending following geopolitical tensions and military modernization programs across NATO member nations.

  The company's defense portfolio encompasses command and control systems, electronic warfare solutions, military simulation platforms, and air traffic management networks controlling one-third of global aviation traffic. Indra supplies critical defense technologies including radar systems, cybersecurity platforms, naval combat systems, and transportation infrastructure used by defense ministries and allied forces worldwide. With rising global defense expenditure and increasing demand for sophisticated military technologies, Indra is strategically positioned to capitalize on European defense modernization initiatives and the growing need for advanced combat systems in response to evolving security threats.

  💡 Why invest in Indra Sistemas?

  Like precision-guided defense systems that deliver mission-critical capabilities across multiple theaters, Indra demonstrates compelling strengths for defense-focused investors.

  • European Defense Leadership: Indra ranks among Europe's top defense contractors with specializing in radar systems, electronic warfare, and military simulation technologies, benefiting from NATO modernization programs and rising defense budgets.
  • Air Traffic Command Dominance: Controls approximately one-third of global air traffic through advanced management systems, creating substantial competitive barriers to entry and generating recurring revenue streams from critical aviation infrastructure.
  • Military Technology Excellence: Develops cutting-edge combat systems, naval defense platforms, and cybersecurity solutions that command premium pricing and secure long-term contracts with defense ministries and allied military forces.
  • Strategic Defense Positioning: Benefits from increased European defense spending and rising geopolitical tensions driving sustained demand for advanced military technologies, NATO interoperability systems, and defense infrastructure.

  🐌 Key considerations before investing in Indra Sistemas

  However, like operating in contested airspace where threats emerge from multiple vectors, Indra faces significant challenges that defense investors must evaluate.

  • Government Contract Dependency: Heavy dependence on defense budgets and government contracts makes the company vulnerable to political changes, spending cuts, and shifts in military priorities that could significantly impact revenue stability.
  • Defense Sector Regulatory Risk: Operating in highly regulated defense markets subjects the company to stringent export restrictions, compliance costs, and geopolitical tensions that can affect international sales and operational flexibility.
  • Competitive Defense Landscape: Faces intense competition from established defense giants like BAE Systems, Thales, and Leonardo that possess superior financial resources, global reach, and well-established NATO relationships.
  • Reputational Risk Exposure: Past controversies and regulatory issues in sensitive defense markets could impact stakeholder trust, customer relationships, and future contract opportunities with government clients requiring security clearances.

  Final thoughts on Indra Sistemas

  Indra's leadership in European defense technology, air traffic management dominance, military system expertise, and strategic NATO positioning create compelling opportunities for investors seeking exposure to the expanding defense sector. However, government contract dependency, defense market volatility, competitive pressures, and reputational sensitivities warrant careful evaluation of specialized defense industry dynamics. Like an advanced radar system providing comprehensive battlefield awareness, Indra combines technological excellence with strategic defense positioning to deliver mission-critical capabilities while navigating the complex landscape of European defense modernization and global security challenges.

If you are interested in other stock categories, check out my other lists of the best defense, european defense, hotel, AI, automotive, tech, retail, real estate, utility, industrial, semiconductor, insurance, manufacturing, energy, financial, healthcare, communication services, construction, cybersecurity, basic materials, beauty, brokers, cloud, european construction, waste management, european retail, european tech, european industrial, european financial stocks.