NEW YORK ( TheStreet) -- Stocks may be cheaper in Europe than the U.S., but Greece's debt still poses risks, one strategist said.
"Stocks are cheaper in Europe and the European Central Bank is more stimulative than the Federal Reserve," said Sameer Samana, senior global strategist at Wells Fargo Investment Institute. "But there's a lot of policy risk around Greece and how they will grow going forward."
Greece's Prime Minister Alexis Tsipras is meeting with European leaders in Brussels on Wednesday to continue negotiations of a possible debt deal, according to Reuters. Debt woes in the Mediterranean nation, which has a $335 million payment to the International Monetary Fund due on June 5, have plagued Europe for years, and voters elected a new government in January that was staunchly opposed to austerity measures.
Aside from Greece, investors are hopeful that the ECB's massive $1.2 trillion stimulus, which began in March in an effort to revive economic growth, will boost stock values across the region. By purchasing bonds, central bankers make it easier for banks to lend money, which fuels investment. That's what happened in the U.S., when the Fed pumped trillions of dollars into the markets after the 2008 recession, sparking a six-years-and-counting rally.
So far this year, the strategy seems to be working in Europe, too. The FTSEurofirst 300 index has returned almost 15% year to date, compared with the S&P 500's 3% gain.
"The most compelling countries in Europe are ones geared toward exports, such as Germany," Semana said. Germany has benefited from the decline in the euro and is home to major exporters, such as BMW ( BAMXY), Bayer ( BAYN), BASF ( BAS) and Siemens."
While Germany's DAX, which tracks 30 blue-chip companies, rose almost 17% since the start of the year, Samana thinks the index has more room for growth, especially if earnings expectations come through as expected.
"We want people invested in Europe and U.S. equities," he said. "We're overweight both asset classes."