Europe’s Biggest Companies Have More Room for Buybacks and Deals

Financial leverage at Europe’s biggest companies is expected to ease this year to the lowest since 2008 and the global financial crisis, potentially allowing for more dividends, buybacks and M&A.

The ratio of net debt to Ebitda for members of the Euro Stoxx 50 index is set to fall to 0.76 times, a little more than half the level as recently as four years ago, according to data compiled by Bloomberg Intelligence. That gives companies “leeway either to increase shareholder cash returns or focus on bolt-on acquisitions,” according to BI strategists Laurent Douillet and Kaidi Meng.

Debt burdens ...