(FORTUNE Magazine) – Want a piece of what could become the world's richest market? Then zero in on stocks of European companies most likely to flourish after the coming consolidation known as 1992. By that year, the European Community expects to eliminate most tariffs and trade barriers between its 12 once-squabbling nations, creating a giant market with some 320 million consumers. When the magic date arrives, more and more European companies will invade one another's markets. As competition intensifies, the winners will be low- cost producers and cash-rich companies with an eye for acquisitions. With the help of security analysts, FORTUNE picked ten European companies with survival power. Their stocks have two important attributes: large market capitalizations and price/earnings multiples that are low for their industries. Your broker must buy some from foreign exchanges; others trade in the U.S. as American Depositary Receipts. If you worry that a rise in the dollar could wipe out overseas gains, take comfort in the fact that many economists expect the greenback to trade within a narrow range relative to European currencies over the next few years. David Altman, a security analyst at Goldman Sachs, likes General Electric Co. PLC of England -- no relation to its U.S. namesake. ''Here's a company,'' says Altman, ''that's really taking Europe 1992 to heart.'' An efficient producer of utility equipment, appliances, weaponry, and aerospace components, GEC has been paring its head count. Altman, who notes that about 25% of the stock price represents cash in the drawer, thinks the company's earnings can grow at a 10% annual pace for several years. Samuel Isaly, senior vice president at S.G. Warburg & Co., has his eye on Bayer, the West German pharmaceutical and chemical giant. ''They're licking their chops,'' says Isaly. Bayer is the world's low-cost producer of commodity plastics, used in everything from auto bumpers to appliances and building materials. The company's pharmaceutical profits, driven by new drugs to treat infection and high blood pressure, are growing 30% a year. The stock sells at only 8.4 times estimated 1988 earnings. As Europe's low-cost producer of stainless steel, Madrid-based Aceranoix should thrive when tariffs tumble, says Cassandra Hardman, a director and senior portfolio manager at PCM International, a subsidiary of Prudential Insurance Co. of America. In fiscal 1987 Aceranoix, which has just retooled with efficient Japanese equipment, earned $39.4 million on sales of $379 million. Hardman thinks the company, with a P/E multiple of 8.4 and earnings projected to grow 30% this year, is a gleaming buy. MOST ECONOMISTS expect Spain, known as the Sunbelt of Europe, to grow faster than any other EC nation in the years ahead. Merrill Lynch's Deborah Kuenstner sees an opportunity in Telefonica de Espana, the phone monopoly. Telefonica is partly government owned, and the authorities have decided to upgrade the system to meet the increased use expected after 1992. Kuenstner thinks earnings will grow about 10% this year and regards the stock, which sells at 11.5 times last year's estimated earnings, as a real bell ringer. Many European companies have been upgrading factories to get ready for 1992, which augurs well for some capital goods stocks. Hardman of PCM International likes two West German companies. Thyssen, an industrial conglomerate that makes specialty steel, automotive components, and high-speed railcars, is also Europe's most efficient producer of ordinary steel. Says Hardman: ''They've done a lot to streamline and modernize facilities.'' MAN, an electrical engineering company that helps build power plants and factories, should also flourish. Hardman likes the company's steady, conservative management, which is strong on strategic planning. She thinks the earnings of both companies will grow between 10% and 15% annually for several years. Until now each European country has had its own set of codes and standards for foods, household goods, and pharmaceuticals, often forcing foreign companies to maintain factories in each country to meet varying requirements. The 1992 reform will lift many restrictions, and corporations like Unilever, the food and household goods giant, will be able to regroup manufacturing and boost profits. Says Andrew Brown, a security analyst at Morgan Stanley in London: ''There's considerable scope for further improvement of margins.'' Brown thinks the stock of Unilever PLC, the British arm of this Anglo-Dutch conglomerate, which sells at 9.7 times estimated 1988 earnings, could rise 15% this year. Hardman of PCM International likes BSN Groupe, a fast-growing French food company that makes a wide range of processed foods and is expanding aggressively in Europe. BSN has been improving its distribution system and broadening its product line. Along with 1992 come open financial markets. David Thomas, an international equity portfolio manager at Putnam Cos., thinks Deutsche Bank is best positioned to pounce on opportunities. Says he: ''It's a broad-based financial services company with the cash to go on the acquisitions trail in Spain and France.'' Thomas believes the stock, recently selling at $304 a share, should rise 15% to 20% this year. Joseph DeSantis of Strategic Research International, a market research firm, likes England's Royal Insurance. The cash-rich property and casualty company is prepared to move when restrictions on cross-border insurance sales fade. At 9.7 times 1988 estimated earnings, says DeSantis, the stock looks cheap.

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: EUROPEAN FAVORITES These companies should do well when trade barriers fall, analysts say. Big centralized plants, like Bayer's drug and chemical complex in Leverkusen, West Germany, should give a competitive edge.