How Investable is Europe?

Goldman Sachs

Research

32 Pages

This report assesses Europe’s long-term investment potential by comparing the region’s equity market structure, capital efficiency, and valuation with global peers. Despite perception issues and sectoral imbalances, the analysis identifies structural strengths that could support sustained investor interest.

Key Takeaways

Capital discipline improves: European firms now return capital more efficiently, with 80% of earnings paid via dividends and buybacks over the last decade
Valuation still attractive: Europe trades at a 30% discount to the U.S. on a sector-adjusted basis, despite improving fundamentals
Sector mix a drag: Europe remains underweight in high-growth sectors like tech and overweight in lower-multiple sectors such as financials and industrials
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