logo
  Join        Login             Stock Quote

Four Consumer Stocks For A 2013 Economic Expansion

 February 04, 2013 10:34 AM
 


With the continuing rebound of the global economy for a fourth consecutive year, corporate revenues and profits are at record highs. US multinational corporations, which have substantial operations abroad, are very well positioned for the expansion in the number of middle class consumers in the developing markets. While there is some weakness in developed economies of Europe, the long-term trends of rapid growth in emerging market economies will be more than sufficient to boost activity on a global basis. There certainly are benefits to having truly global operations, as economies fare on different cycles. For example, in the late 1990's, many emerging markets in such as Russia experienced negative growth and high inflation. The Asian financial crisis in the mid to late 1990's also affected many countries such as Thailand, Indonesia and Hong-Kong. In the 2000's however, the Russian economy expanded. The Asian economies have been growing as well, fueled by China and India.

[Related -Coca-Cola Company (KO) Dividend Stock Analysis]

I expect the following companies to benefit from the rise of the middle class in emerging markets due to their strong brand names and because of their status:

The Coca-Cola Company (KO), a beverage company, engages in the manufacture, marketing, and sale of nonalcoholic beverages worldwide. Some of the best opportunities for Coca-Cola include the emerging markets of India and China, with their 2 billion plus consumers. In the US, consumers take around 400 servings of Coke products/year. In China however, consumers take just 34 servings of Coke products/year. This figure is even lover for India with 11 servings/year. The company is trading at 19.50 times earnings and yields 2.80%. This dividend king has managed to boost distributions for 50 years in a row. (analysis)

[Related -Yum! Brands, Inc.(NYSE:YUM): An Attractive Stock To Own Given Potential EPS Growth]

The Procter & Gamble Company (PG), together with its subsidiaries, engages in the manufacture and sale of a range of branded consumer packaged goods. The company is positioned very well for the increase in number of middle-class consumers in the emerging market world. As more consumers worldwide increase their disposable incomes, they would be introduced and able to spend more on items that the typical American consumer takes for granted today. It also has a stable recurring revenues in the developed countries in North America and Europe, which grow more slowly, but provide stable cash flow. The company is trading at 17.10 times earnings and yields 3%. This dividend king has managed to boost distributions for 56 years in a row.  (analysis)

Philip Morris International Inc. (PM), through its subsidiaries, manufactures and sells cigarettes and other tobacco products. While the number of smokers in the developed world has been flat to decreasing, number of smokers in the emerging markets is on the rise. In addition, legislation to ban smoking at the same levels as in the US are at least one – two decades away. The company is trading at 17.60 times earnings and yields 3.90%. Philip Morris International has managed to regularly hike dividends in every year since 2008.  (analysis)

YUM! Brands, Inc. (YUM), together with its subsidiaries, operates quick service restaurants in the United States and internationally. Yum! has managed to outmaneuver close rival McDonald's in China, opening 4,500 restaurants to date. The company also sees the situation in India being similar to China from ten years ago. The possibilities for strong same-store sales coupled with an increase in total number in units, provide for a stable base for explosive long-term growth for the company. The company is trading at 19.10 times earnings and yields 2.10%. YUM! Brands has managed to boost distributions for 9 years in a row.

Full Disclosure: Long KO, PG, PM, YUM

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageXerox Corp. (XRX): An Insider’s $500,000 Insider Buy

Last week was a healthy week of insider buying as 194 companies reported purchase records. The number read on...

article imageQihoo 360 Technology Co Ltd. (QIHU) Q2 Earnings Preview: A Green Monday

Qihoo 360 Technology Co Ltd. (NYSE:QIHU) will report its second quarter 2014 financial results on Monday, read on...

article imageSix Stocks that Could Outperform in the next 90 days

Earlier today, Goldman Sachs put out its list of the 50 stocks that Matter Most. It’s a list of the 50 read on...

article imageFoot Locker, Inc. (FL) Q2 Earnings Preview: Running Past the Street View

Foot Locker, Inc. (NYSE:FL) plans to report financial results for its second quarter ended August 2, 2014 read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.