Allianz Investment: Seize dividend opportunities in the European industrial revival by actively allocating quality industrial companies with stable cash flow and sustainable dividends

According to the Zhitong Finance APP, recently, Allianz Investment stated that as structural trends begin to support corporate performance, the outlook for the European industrial sector is gradually improving. The current market environment is consistent with the direction of the Allianz European Equity Dividend Strategy. Traditionally, the industrial sector, due to its relatively low dividend yield, is often not viewed as a primary allocation target by dividend-oriented investors. However, the institution's strategy has long adopted a different approach, actively allocating to quality industrial companies with robust cash flow and sustainable dividends. This allows the institution to participate in sectors with potential and sustained growth in the market and capture long-term value opportunities brought about by the reshaping of European industry.

As the United States clarifies its tariff policies, Europe is entering a new phase of strategic reshaping. This transformation is guided by common goals, including enhancing competitiveness, achieving climate objectives, and consolidating economic sovereignty. Since early 2025, governments across Europe have successively launched targeted investment plans to support long-term growth and industrial transformation while strengthening autonomy in key areas such as energy, transportation, and defense. The trade agreement reached in July 2025 provides a clearer framework for transatlantic trade, but the remaining tariff expectations are still expected to cumulatively reduce EU GDP by about 0.2% to 0.3% over the next few years. Although the extent of this growth drag is limited, the anticipated fiscal responses across Europe are expected to offset its impact.

France launched the "France 2030" investment plan in August 2024, with a scale of €540 billion, aimed at accelerating industrial innovation, energy transformation, and technological sovereignty. Germany initiated a transformation and infrastructure fund of €500 billion in early 2025, which is expected to cumulatively drive GDP growth by up to 2.1% by 2027, mainly benefiting from the strong multiplier effect in industrial supply chains, employment, and innovation sectors. In addition, the federal government also significantly increased defense spending in 2025. As part of a broader investment push, the German federal government confirmed in the official fiscal budget passed in June 2025 that it would strengthen resource allocation in external and internal security areas.

Allianz Investment mentioned that these measures are expected to bring significant momentum to the industrial sector, especially in aerospace, electronic technology, cybersecurity, and advanced manufacturing, further consolidating Germany's role as a major driver of re-industrialization in Europe. In the UK, the government announced a comprehensive infrastructure strategy worth £725 billion in June 2025, covering transportation, energy, digital infrastructure, and public services. This strategy aims to drive substantial improvements nationwide, enhance supply chain capabilities, address technical labor shortages, create high-quality jobs, and support long-term economic growth and corporate investment. In the Nordic region, Finland, Denmark, and Sweden have launched several coordinated infrastructure and energy projects, including cross-border cooperation to develop offshore wind power, grid expansion, and industrial decarbonization.

In line with national policies, the EU is also promoting industrial revival through a series of strategic plans aimed at enhancing long-term competitiveness and resilience. In addition to projects such as the "Clean Industrial Deal" and the "DIGITAL Programme," one of the EU's core responses is the "REARM Europe" defense initiative, which is expected to mobilize up to €800 billion in funding over the next few years Covering grants, loans, and joint projects from various countries.

These investments aim to enhance security while accelerating industrial innovation and transformation. The EU-level plans are directing significant public and private funds towards clean energy, digital infrastructure, and manufacturing transformation. Its coordinated approach marks a shift from passive response to proactive industrial strategy.

Allianz Investment stated that as structural trends begin to support corporate performance, the outlook for the European industrial sector is gradually improving. Demand in automation, transportation, and construction continues to rise, with private funds increasingly supplementing public investment. The latest Purchasing Managers' Index (PMI) data shows that the Eurozone manufacturing sector returned to expansion territory in August 2025, with an index of 50.5, marking the first rebound since mid-2022.

Market consensus predicts that European industrial companies will record some of the strongest profit growth globally, with earnings per share (EPS) expected to rise by about 12.5% from 2024 to 2026. Although the industrial sector has traditionally not been a core area for dividend investment, this situation is gradually changing. Robust balance sheets, prudent capital utilization, and resilient cash flows are supporting more attractive dividend performance.