(Adds Standard & Poor's possible downgrade of Germany and France.)BOSTON ( TheStreet) -- Deutsche Bank's ( DB) securities unit says Europe will likely fall into a recession soon and shares on the Continent will lag behind those in the U.S. Still, Germany's largest bank cites a range of European stocks that do business all over the world, helping them weather the turmoil in fine shape. They include a trendy watch maker, a firm that makes ball bearings, and one of the world's largest oil companies. Standard & Poor's said it may cut Germany's and France's AAA credit ratings as the agency put 15 euro nations on review for a downgrade. The eurozone's six AAA-rated countries are among those to be placed on a negative outlook. Their credit ratings may be lowered depending on the result of a European Union summit Friday, Standard & Poor's said. Deutsche Bank's analysts' thesis is that even if the eurozone economy goes to hell until it gets its sovereign debt in order, the firms it picked aren't going away because of their solid fundamentals, niche markets, brand strength and, most of all, broad international exposure. "Our preference overall is for the right kind of globally exposed stocks where the enterprise value and free cash flow has fallen to levels that look attractive," Deutsche Bank said in a report. "Keeping an eye on cash flow is obviously advisable in this environment." And it is obviously a tough year for European stocks, with the benchmark Stoxx Europe 600 Index down 12%. The S&P 500 Index of the largest U.S. stocks is about break even on the year. Here are seven of Deutsche Bank's top European stock picks that trade on U.S. exchanges as American Depositary Receipts (ADRs):
Royal Dutch Shell ( RDS.A), with a market value of $222 billion, is one of the world's largest integrated oil companies, with exploration, production and refining operations worldwide. Its challenge is competing with the handful of other "super majors" for the remaining oil resources worldwide. Royal Dutch Shell's shares have a three-year average annual return of 16% and they carry a 4.83% projected dividend yield.
William Demant Holdings ( WILYY) is a new ADR. It is a Denmark-based company with a market value of $4.6 billion, engaged in the development, manufacture and sale of sophisticated electronics products and equipment to aid in communication. They include hearing aids, medical diagnostic instruments, and personal communication systems. William Demant's shares are trading at $16.01.