The financial market slump caused by the coronavirus crisis has created historic opportunities to buy high-dividend equities in Europe, according to NN Investment Partners (NN IP).

NN IP says it has been actively using the sell-off to increase quality in its Euro High Dividend Strategy, buying or adding to companies with strong balance sheets and good dividend cover, funded by reducing some of the higher-risk names and thereby taking advantage of temporary market inefficiencies.

Even adjusting for a 30 percent cut in 2020 earnings per share forecasts in Europe, which NNIP says seems inevitable given the current economic outlook, dividends remain well-covered in aggregate across the Strategy's portfolio, which has seen its average dividend yield moved to 5.7 percent on March 20 from 4.3 percent at the end of February. The portfolio's earnings yield north of ten percent offers a significant dividend sustainability's margin of safety.

Nicolas Simar, Senior Portfolio Manager Euro & European High Dividend, NN Investment Partners commented: "A lot of babies are being thrown out with the bathwater. High-quality businesses with solid balance sheets that will certainly see out this crisis in good shape are being sold almost as aggressively as those with more tentative outlooks.

"Whatever the challenges of the coming months, we are likely to look back on this episode as a historic opportunity to invest in high-quality companies at valuation lows."

How do I enable cookies in my browser?

Internet Explorer
1. Click the Tools button (or press ALT and T on the keyboard), and then click Internet Options.
2. Click the Privacy tab
3. Move the slider away from 'Block all cookies' to a setting you're comfortable with.

Firefox
1. At the top of the Firefox window, click on the Tools menu and select Options...
2. Select the Privacy panel.
3. Set Firefox will: to Use custom settings for history.
4. Make sure Accept cookies from sites is selected.

Safari Browser
1. Click Safari icon in Menu Bar
2. Click Preferences (gear icon)
3. Click Security icon
4. Accept cookies: select Radio button "only from sites I visit"

Chrome
1. Click the menu icon to the right of the address bar (looks like 3 lines)
2. Click Settings
3. Click the "Show advanced settings" tab at the bottom
4. Click the "Content settings..." button in the Privacy section
5. At the top under Cookies make sure it is set to "Allow local data to be set (recommended)"

Opera
1. Click the red O button in the upper left hand corner
2. Select Settings -> Preferences
3. Select the Advanced Tab
4. Select Cookies in the list on the left side
5. Set it to "Accept cookies" or "Accept cookies only from the sites I visit"
6. Click OK

The financial market slump caused by the coronavirus crisis has created historic opportunities to buy high-dividend equities in Europe, according to NN Investment Partners (NN IP).

NN IP says it has been actively using the sell-off to increase quality in its Euro High Dividend Strategy, buying or adding to companies with strong balance sheets and good dividend cover, funded by reducing some of the higher-risk names and thereby taking advantage of temporary market inefficiencies.

Even adjusting for a 30 percent cut in 2020 earnings per share forecasts in Europe, which NNIP says seems inevitable given the current economic outlook, dividends remain well-covered in aggregate across the Strategy's portfolio, which has seen its average dividend yield moved to 5.7 percent on March 20 from 4.3 percent at the end of February. The portfolio's earnings yield north of ten percent offers a significant dividend sustainability's margin of safety.

Nicolas Simar, Senior Portfolio Manager Euro & European High Dividend, NN Investment Partners commented: "A lot of babies are being thrown out with the bathwater. High-quality businesses with solid balance sheets that will certainly see out this crisis in good shape are being sold almost as aggressively as those with more tentative outlooks.

"Whatever the challenges of the coming months, we are likely to look back on this episode as a historic opportunity to invest in high-quality companies at valuation lows."