--- title: Is it time for European equities? description: US companies have been more resilient to the covid crisis. In any case, once the worst of the crisis has passed, the rotation towards more value companies is setting the tone for this year, and the Euro Stoxx can benefit from this. image: https://blog.anchoreafi.com/hubfs/image-png-May-12-2021-10-15-52-45-AM.png --- ![](https://blog.anchoreafi.com/hubfs/image-png-May-12-2021-10-15-52-45-AM.png) # Is it time for European equities? Published by [ Josep Duran ](https://blog.anchoreafi.com/en/author/josep-duran) on May 18, 2021 8:45:00 AM Over the past few years, the US stock market has performed much better than the European stock market. That is not a secret. ![](https://blog.anchoreafi.com/hubfs/image-png-May-12-2021-10-15-52-45-AM.png) From this graph we can extract some interesting conclusions. As we can see, in the last 15 years, the outperformance of the S&P 500 has been constant: approximately, 80% of the time, the S&P 500 has outperformed the Euro Stoxx in 1-year returns. In addition, this outperformance has been, on average, 10%. Meanwhile, the times the Stoxx outperformed the S&P 500 (only 20% of the time it did), it was by only 2.5%. This outperfomance is due to the fact that the profits of American companies are constantly growing, and they recover much faster from crises. In fact, earnings per share (EPS) of the Stoxx 50 are lower today than in the 2008 ![](https://blog.anchoreafi.com/hubfs/image-png-May-12-2021-10-20-49-03-AM.png)   Could this trend change? Well, to answer that question, we have to look at how the two indices are coming out of the covid crisis. As we can see, during last year's crisis, European companies showed much less resilience, and profits fell much more. ![](https://blog.anchoreafi.com/hubfs/image-png-May-14-2021-09-10-18-25-AM.png) However, this means that, once we return to a "complete" normality, profits will start from a lower point and, therefore, grow more. In this very atypical year, where we are seeing a rotation towards more "value" companies, such as financial, industrial or energy sectors, there could be an outperformance of the Stoxx 50. For the moment, the Euro Stoxx surpasses, albeit slightly, the S&P 500 so far in 2021. However, it will be the earnings growth forecasts for 2022 and 2023 that will mark the growth path of the two indices and, as we can see in the last chart, they are quite even in that sense. Tags: [United States](https://blog.anchoreafi.com/en/tag/united-states), [Europe](https://blog.anchoreafi.com/en/tag/europe), [Equity](https://blog.anchoreafi.com/en/tag/equity) [Back to Blog](https://blog.anchoreafi.com/en) - [Tweet](https://twitter.com/share) ## Related Articles ## [Are cheap companies a better investment?](https://blog.anchoreafi.com/en/are-cheap-companies-a-better-investment?hsLang=en) Financial logic tells us that companies with a lower PE Ratio are cheaper and, consequently, those... [Read More ](https://blog.anchoreafi.com/en/are-cheap-companies-a-better-investment?hsLang=en) ## [Rotation towards Value: How long can it last?](https://blog.anchoreafi.com/en/rotaci%C3%B3n-hacia-c%C3%ADclicos-cu%C3%A1nto-puede-durar?hsLang=en) Over the past ten years we have become used to Growth stocks yielding much higher returns than... [Read More ](https://blog.anchoreafi.com/en/rotaci%C3%B3n-hacia-c%C3%ADclicos-cu%C3%A1nto-puede-durar?hsLang=en) ## [Value investing: tailwinds](https://blog.anchoreafi.com/en/value-investing-todos-los-vientos-de-cola?hsLang=en) It's no secret that Value investing is doing better than Growth in 2022. Here's a look at why... [Read More ](https://blog.anchoreafi.com/en/value-investing-todos-los-vientos-de-cola?hsLang=en) **