Filed Under:
Tickers in this Article: NKE, KO, PEP, KFT
In this trying time there is something to be said about going with what you know and sticking with resilient brands. That said there are a number of big brand names that deserve a closer look given their future earnings potential and their recent performance.

IN PICTURES: 9 Ways To Use A Tax Refund

A Snug Fit
Nike (NYSE:NKE), famous for its shoes and athletic gear (and associated with a number of big name athletes), is a company that has the potential to show strong growth in the future. It markets itself very well to people around the world that have lots of money. To be clear though, Nike isn't just a company that can perform in the future, it is a company that is performing now. A look at the data indicates that the Oregon based legend has beaten sell-side expectations in each and every quarter over the past year. It is also expected to earn $3.86 per share this year and $4.36 next year, which would be quite an accomplishment in this environment.

Nike is a company that comes to mind because it is expected to release its fourth quarter numbers toward the end of June. Wall Street is expecting the company to earn $1.05 a share in the period. With the economy showing some signs of reemergence, my eyes will be peeled for any guidance the company (hopefully) offers for the upcoming year.

Other Big Brands Worth A Look
Kraft (NYSE:KFT) is another big brand name that comes to mind. The company has been very consistent when it comes to its earnings. In fact, data shows it has positively surprised the Street in the last four quarters straight. The company is also expected to grow more than 7% per annum in the next five years - a clear positive. The bottom line here is that with the consumer more apt to revert to name brand foods as the economy recovers, and the company is sitting in a good position.

Coca Cola (NYSE:KO) is another brand that deserves attention with the economy showing some nice signs of life. More of us are likely to go out to lunch or dinner with our family or friends and purchase beverages for private consumption. Coke is expected to earn $3.45 a share this year and to grow its bottom line to $3.75 a share next year. My affection for the soft drink space isn't limited merely to Coke, because Pepsi looks attractive to yours truly as well. At present the New York soft drink company is expected to earn almost $4.16 a share this year, and to earn $4.64 per share next year. It trades at about 14.2 times next year's estimate.

Bottom Line
Nike, Coca Cola and Kraft are solid brands that not only have great long-term earnings potential, but also have attractive qualities right now. (For more on analyst expectations, be sure to read Analyst Forecasts Spell Disaster For Some Stocks)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

comments powered by Disqus

Trading Center