#60 World's best stocks - Ep.5
Special France Edition!
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Welcome to episode 5 of the “World’s best stocks”. As for the previous episodes, I used the Finchat (Affiliate Link) screener to find the best companies.
France is not only known for its beauty and culture; it’s also home to some of the world's most impressive businesses. While many investors are familiar with the big names in the luxury sector like LVMH, Hermès, and Kering, the French market offers much more beyond this industry. From innovative tech firms to industry leaders in energy and manufacturing, there are plenty of compelling investment opportunities to explore. Given the wealth of exceptional companies, I'll be sharing an additional post to dive deeper into these great businesses. But for now, let’s take a closer look at some standout French companies worth your attention.
#1 L’Oréal
ROIC 5Y Average = 13.05%
Revenue 5Y CAGR = 8.54%
Diluted EPS before extra items 5Y CAGR = 11.52%
Net Debt/EBITDA = 0.69
EPS Forward 2Y CAGR = 6.74%
Market Cap = €192 billion
Total Return last 5Y = 36%
Forward P/E = 25.59
L'Oréal, founded in 1909, stands as a global leader in the beauty industry, offering a wide array of products in skincare, haircare, makeup, and fragrances. The company’s business model is organized into four main divisions: Professional Products, Consumer Products, L'Oréal Luxe, and Active Cosmetics, each designed to target distinct market segments. Innovation is a core focus for L'Oréal, with over €1 billion invested annually in research and development to drive product advancements and maintain its competitive edge.
The company’s extensive portfolio features 36 brands, including Maybelline, Garnier, NYX Professional Makeup, Redken, and CeraVe, appealing to a broad range of consumer preferences and price points. This diversity not only strengthens its market presence but also ensures that L'Oréal remains relevant across different consumer needs and trends.
First thoughts
The company’s diverse portfolio covers skincare, haircare, makeup, and luxury products, which keeps it resilient even when the economy is unpredictable. L'Oréal really understands that beauty is more than just a luxury—it’s tied to confidence and self-expression. This makes its products essential for many people, regardless of economic shifts.
One thing that stands out is how much L'Oréal invests in R&D every year. This keeps the company ahead of trends and ensures it keeps launching innovative products that people love. Plus, its strategic reach across both emerging and developed markets means it’s well-positioned to tap into the growing global demand for beauty products that are both premium and accessible.
Despite these strengths and great long-term growth potential, L'Oréal’s current stock valuation is actually below its historical averages. This could be a good entry point for investors looking to invest in a market leader with solid fundamentals.
#2 Air Liquide
ROIC 5Y Average = 4.38%
Revenue 5Y CAGR = 7.17%
Diluted EPS before extra items 5Y CAGR = 7.2%
Net Debt/EBITDA = 1.56
EPS Forward 2Y CAGR = 9.48%
Market Cap = €97 billion
Total Return last 5Y = 80%
Forward P/E = 23.96
Air Liquide, founded in 1902, is a French multinational corporation specializing in industrial and medical gases, technologies, and services. With operations in 60 countries and a workforce of around 66,300 employees, the company serves over 4 million customers and patients worldwide. Its key offerings include essential small molecules such as oxygen, nitrogen, and hydrogen, which are critical for life, matter, and energy.
Air Liquide’s business model spans sectors including Large Industries, Industrial Merchant, Healthcare, and Electronics, delivering tailored solutions across diverse industries. The company places strong emphasis on innovation and sustainability, dedicating efforts to energy transition and environmental initiatives as central pillars for future growth. This commitment positions Air Liquide as a forward-thinking leader in addressing both industry needs and global sustainability challenges.
First thoughts
Air Liquide is a leader in industrial gases, serving a wide range of sectors, from healthcare to energy and manufacturing. This variety helps keep revenue steady, even when parts of the economy slow down, which is a huge plus right now. Financially, Air Liquide has a strong track record. Even with economic challenges, the company manages to maintain good margins, and consistently pay dividends—which is great for reliable income.
From my point of view the stock is fairly valued at the moment. Air Liquide's leadership in green tech and strong financial health make it a solid long term pick for anyone who wants stability with room for growth as the world shifts toward more sustainable energy solutions.
#3 Schneider Electric
ROIC 5Y Average = 7.96%
Revenue 5Y CAGR = 6.49%
Diluted EPS before extra items 5Y CAGR = 10.75%
Net Debt/EBITDA = 1.62
EPS Forward 2Y CAGR = 14.16%
Market Cap = €135 billion
Total Return last 5Y = 207%
Forward P/E = 26.06
Schneider Electric, established in 1836, is a French multinational corporation that leads in digital automation and energy management solutions. The company provides a broad range of products and services, including building automation, industrial control systems, and critical power solutions, catering to sectors like buildings, data centers, infrastructure, and various industries. Operating in over 100 countries with a workforce of approximately 168,000 employees, Schneider Electric reported €35.9 billion in revenue in 2023.
The company's business model is centered around delivering integrated, AI-enabled Industrial IoT solutions through its EcoStruxure platform, which seamlessly combines connected products, automation, software, and services to boost efficiency and sustainability. With a strong commitment to innovation and sustainability, Schneider Electric invests heavily in research and development to drive progress in electrification, automation, and digitization, helping customers optimize their energy use and resource management.
First thoughts
I’m not deeply familiar with the company, which makes assessing its future prospects challenging at this stage. From what I can see, analysts are forecasting a 5.98% compound annual growth rate (CAGR) for revenue over the next two years and an impressive 14.16% growth in earnings per share (EPS). These numbers indicate solid performance expectations, which is definitely promising. However, the stock is currently trading well above its historical averages. Given this valuation, it doesn’t seem like an attractive entry point for new investors at the moment. Without a deeper understanding of the company’s fundamentals and strategy, the high valuation poses a risk, suggesting it might be wise to wait for a more favorable price or better insight before considering an investment.
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Disclaimer: The information provided in this publication is for educational and informational purposes only and does not constitute financial advice. The content is solely reflective of my personal views and opinions based on my research and is not intended to be used as a basis for investment decisions. While every effort is made to ensure that the information is accurate and up-to-date, the writer makes no representations as to the accuracy, completeness, suitability, or validity of any information in this post and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All readers are advised to conduct their own independent research or consult a professional financial advisor before making any investment decisions. The author is invested in Air Liquide and L’Oréal.