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Irish Economy Rebounds in Q2: 4 Great Picks

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Per the latest report by Ireland’s Central Statistics Office on Sep 13, the fastest-growing economy of the European Union surged beyond expectations in the second quarter. Growth was buoyed by a steady increase in technology exports. With unemployment already near a 10-year low, the country has witnessed strength in its service sector as well as household spending.

Further, under tight labor market conditions, wages in the country have risen steeply. Taking such factors into consideration, betting on stocks from Ireland seems prudent at the moment.

Technology Exports Boost Irish GDP in Q2

Ireland’s GDP surged 2.5% in the second quarter, increasing 9% from the year-ago quarter. For the record, the country’s economic growth has outperformed every other country in the European Union (EU) since 2014. This growth has been achieved primarily on the back of a rise in technology exports and an uptick in consumer spending.

Further, modified total domestic demand increased 0.4% from the first quarter. Personal consumption expenditure rose at an annual rate of 4.4% in the April-June period. The country’s economy has also benefited from a robust labor market. Ireland’s unemployment fell to 5.6% and remains near a 10-year low.

Meanwhile, gross national product (GNP) rose 0.7% in the period, up 11.9% from the year-ago quarter.

Ireland to Become Top Business Hub Post Brexit

In a report published by the financial accountancy firm, Ernst & Young on Jun 25, about 21 financial services companies reported that they vested their faith in Ireland in the sense that they have vowed to move the majority of their operations from Britain to Ireland following Brexit. Consequently, the report named Dublin as the most-popular business hub post Brexit.

The European country has remained a top hub for U.S. multinationals due to its low corporate income tax rate. Post Brexit, multinationals looking to tap the European market and its more than 500 million residents, would have to look toward to Ireland as it will become the only English-speaking region which continues to be part of the EU. Further, Ireland’s strong financial and economic position is likely to attract more business houses.

4 Best Choices

Ireland’s growth in the past few years not only shows its resilience to the economic downturn in the EU but also makes it one of the most business-friendly destinations of the region. With the unemployment level near a 10-year low, higher wages and burgeoning service activity call for investing in stocks from the country.

In this context, we have selected four stocks that are expected to gain from these factors. These four stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ingersoll-Rand Plc (IR - Free Report) is a designer, manufacturer and seller of industrial and commercial products.

The company is based out of Swords. The expected earnings growth rate for the current year is 22.84%. The Zacks Consensus Estimate for the current year has improved 4.5% over the last 60 days.

Endo International plc is the manufacturer and seller of generic and branded pharmaceutical products.

The company is based out of Dublin. The expected earnings growth rate for the current year is 13.14%. The Zacks Consensus Estimate for the current year has improved 9.7% over the last 60 days.

Glanbia plc (GLAPY - Free Report) is a provider of nutrition products such as powders, snacks and bars, cheese and ready-to-drink beverages.

The company is based out of Kilkenny. The expected earnings growth rate for the current year is 0.20%. The Zacks Consensus Estimate for the current year has improved 0.4% over the last 60 days.

Smurfit Kappa Group plc  is a manufacturer and distributor of paper-based packaging products.

The company is based out of Dublin. The expected earnings growth rate for the current year is 58.79%. The Zacks Consensus Estimate for the current year has improved 7.9% over the last 60 days.

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