American companies were at the top of the list of most valuable brands recently compiled by Interbrand, a brand management and consulting firm. The top five brands on the list are collectively worth close to $300 billion.
IN PICTURES: Eight Ways To Survive A Market Downturn

Interbrand considers three factors when establishing its ranking. The company measures the financial performance of the firms utilizing an economic profit approach, or the return after the cost of capital is deducted. Interbrand considers the role of the brand in guiding a consumer's decision to buy, exclusive of price, feature or other considerations. They also incorporate the strength of the brand into the calculation based on the ability of the brand to "secure the delivery of expected future earnings." The firm uses these factors to come up with the top 100 global brands and assigns a monetary value to each brand.

Top 5 Brands
The Coca-Cola (NYSE:KO) brand is the most valuable in the world with a value of $70.4 billion. This makes sense since the brand has been around for more than 100 years and the company has an aggressive marketing strategy. Coca-Cola sells more than 3,000 products in 200 countries. The company spent $2.8 billion in advertising in fiscal 2009 to defend its title.

IBM (NYSE:IBM) came in second on the list with a brand valued at $64.7 billion. IBM has transformed itself over the last generation and moved from a hardware company to a service oriented company, keeping up as the world around it changed rapidly.

Microsoft (Nasdaq:MSFT) was third with a brand valued at $60.9 billion. This is an interesting one considering how much resentment there seems to be about the company's dominant share of the operating system market for PC's and the perceived robustness of that product in popular culture. The company's profitability and financial soundness must have made up for this. Microsoft reported net income of $18.7 billion in fiscal 2010.

Google (Nasdaq:GOOG) was the youngest brand on the list and came in fourth with a value of $43.5 billion. Google's placement also makes sense; despite the youth of the Google brand, the company's search engine has been integrated into the daily life of most Americans and worked its way into popular culture. The company reported a 65.4% search market share in Sept 2010.

General Electric (NYSE:GE) was number five with a brand valued at $42.8 billion. Although the General Electric brand is as old and storied as Coca-Cola, the stock was brutalized during the recent recession, and fell to below $6.00 per share in 2009. (To learn about industries that did not falter during the recession, see Industries That Thrive On Recession.)

Bottom Line
The top five global brands were all American companies, although they all do considerable business around the globe. This brand strength should lead to even more profitability in the future.

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

Related Articles
  1. Stock Analysis

    How Toyota Succeeds at Home and Abroad (TM)

    Japan's biggest car manufacturer is also one of North America's biggest, delighting shareholders with its high profit margins.
  2. Stock Analysis

    Analyzing Microsoft's Return on Equity (ROE) (MSFT)

    Discover a detailed analysis of Microsoft's historical return on equity, and learn how its ROE stacks up to its competitors in the tech industry.
  3. Stock Analysis

    Starbucks: Profiting One Cup at a Time (SBUX)

    Starbucks is everywhere. But is it a worthwhile business? Ask the shareholders who've made it one of the world's most successful companies.
  4. Stock Analysis

    How Medtronic Makes Money (MDT)

    Here's the story of an American medical device firm that covers almost every segment in medicine and recently moved to Ireland to pay less in taxes.
  5. Investing News

    Latest Labor Numbers: Good News for the Market?

    Some economic numbers are indicating that the labor market is outperforming the stock market. Should investors be bullish?
  6. Investing News

    Stocks with Big Dividend Yields: 'It's a Trap!'

    Should you seek high yielding-dividend stocks in the current investment environment?
  7. Investing News

    Should You Be Betting with Buffett Right Now?

    Following Warren Buffett's stock picks has historically been a good strategy. Is considering his biggest holdings in 2016 a good idea?
  8. Products and Investments

    Cash vs. Stocks: How to Decide Which is Best

    Is it better to keep your money in cash or is a down market a good time to buy stocks at a lower cost?
  9. Investing News

    Who Does Cheap Oil Benefit? See This Stock (DG)

    Cheap oil won't benefit most companies, but this retailer might buck that trend.
  10. Investing

    How to Ballast a Portfolio with Bonds

    If January and early February performance is any guide, there’s a new normal in financial markets today: Heightened volatility.
  1. When does a growth stock turn into a value opportunity?

    A growth stock turns into a value opportunity when it trades at a reasonable multiple of the company's earnings per share ... Read Full Answer >>
  2. What is the formula for calculating EBITDA?

    When analyzing financial fitness, corporate accountants and investors alike closely examine a company's financial statements ... Read Full Answer >>
  3. How do I calculate the P/E ratio of a company?

    The price-earnings ratio (P/E ratio) is a valuation measure that compares the level of stock prices to the level of corporate ... Read Full Answer >>
  4. How do you calculate return on equity (ROE)?

    Return on equity (ROE) is a ratio that provides investors insight into how efficiently a company (or more specifically, its ... Read Full Answer >>
  5. How do you calculate working capital?

    Working capital represents the difference between a firm’s current assets and current liabilities. The challenge can be determining ... Read Full Answer >>
  6. What is the formula for calculating the current ratio?

    The current ratio is a financial ratio that investors and analysts use to examine the liquidity of a company and its ability ... Read Full Answer >>
Trading Center