BT Group plc (ADR) (BT), Ryanair Holdings plc (ADR) (RYAAY): The Top European Ideas for Your Portfolio

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Still losing sales at a decreasing, although still very high, 5% year-over-year rate and trading at 12 times 2013 earnings and 5.3 times EV/EBITDA, I think the company is a bet on the recovery of the European telecom market. Moreover, the company has significant margin upside through cost cutting and is one of the very few European telecom companies with a reasonable net debt ratio (1.3 times EBITDA) . The company is expected to pay a 3.1% cash dividend yield this year. Meanwhile, it is generating an 8% free-cash-flow yield.

The Foolish conclusion

The three companies above provide substantial up-side but, at the same times, they also come with great risk. Europe is still in trouble, and European asset prices shall suffer in the event of bad news, such as the recent political trouble in Portugal. Adidas is the only company in this group of three that should stay unmoved by political uncertainties in the Old World. That said, BT Group plc (ADR) (NYSE:BT) and Ryanair Holdings plc (ADR) (NASDAQ:RYAAY) provide the most up-side if the situation in Europe clears up.

The article The Top European Ideas for Your Portfolio originally appeared on Fool.com and is written by Federico Zaldua.

Federico Zaldua has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Federico is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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