Google Inc (GOOG), Starbucks Corporation (SBUX), The Coca-Cola Company (KO): These 3 Stocks Have Wonderful “Brand Moats”

While this company may not be the first business you think of as a “growth stock,” its insurmountable moat is what helps its expansion. This business built such a strong following that its fans literally revolted when it tried to change its taste to be more “Pepsi-like.” With new, and healthier, products like Vitamin Water and Odwalla now complimenting their rabid The Coca-Cola Company (NYSE:KO) fan base, this brand leader should keep delivering refreshing returns.

The best brands always win

This is my short-list out of the “most recognized” list. These brands are the best of the best. The “brand moat” they enjoy just means that their logos are so recognizable that customers buy them out of habituation.

The “habituation effect” of these brands gives these companies distinct competitive advantages. They get to skip advertising costs and charge more than competitors, two advantages that pad margins. They also find it easier to increase prices, something that helps in periods of inflation.

So ask yourself this, if we can agree that great brands enjoy these advantages, why would you want to invest in anything else?

Adem Tahiri owns shares of Google and Starbucks. The Motley Fool recommends Coca-Cola, Google, and Starbucks. The Motley Fool owns shares of Google and Starbucks.

The article These 3 Stocks Have Wonderful “Brand Moats” originally appeared on Fool.com and is written by Adem Tahiri.

Adem is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.