Looking in your refrigerator you may see a container of Minute Maid Orange Juice or Apple Juice, or even a liter of Sprite. These three products represent just a small part of beverage giant The Coca-Cola Company (NYSE:KO)’s brand portfolio.
The Coca-Cola Company (NYSE:KO) sells a variety of “sparkling” beverages comprised of its iconic The Coca-Cola Company (NYSE:KO) brand, Fanta, Sprite, and lesser known sodas such as Mr. Pibb and Mello Yello. Increasing perception of soda unhealthiness serves as a friction point for growth in this category; however, Coca-Cola still managed to grow sparkling beverage volume 3% in its most recent quarter according to its latest earnings announcement.
In response to changes in consumer preference for healthier drinks, Coca-Cola constantly innovates in the area of “non-sparkling” beverages. The Coca-Cola Company (NYSE:KO)’s commonly known non-sparkling brands consist of Dasani bottled water, PowerAde energy drink, and the Fuze drink line. Coca-Cola’s still beverage volume increased 6% in its most recent quarter.
The Coca-Cola Company (NYSE:KO)’s revenue and free cash flow increased 66% and 40% respectively over the past five years giving investors a return of 44% versus an S&P 500 return of 15%, not including dividends, according to the company’s investor relations website.
The Coca-Cola Company (NYSE:KO)’s strength lies in its diverse portfolio of products. Its broad line of non-sparkling beverages from bottled water to tea will enable the company to maintain its supremacy in the beverage markets.
Moving on to the cupboard, you may see Ortega taco seasoning or a box of Cream of Wheat made by food conglomerate B&G Foods, Inc. (NYSE:BGS). In addition, the company also makes many other brands you may be familiar with such as Accent food flavoring and Joan of Arc beans.
B&G Foods, Inc. (NYSE:BGS) increased revenue and free cash flow 34% and 354% respectively over the past five years translating into a return of 281% versus a 15% return for the S&P 500, not including dividends, according to its investor relations website.
In the most recent quarter, B&G Foods, Inc. (NYSE:BGS) paid down some debt reducing its interest expense. It’s a plus anytime a company wants to pay down debt. B&G Foods, Inc. (NYSE:BGS) is worthy of your research time.
You may also notice some Jif peanut butter, Folger’s coffee or The J.M. Smucker Company (NYSE:SJM)’s jelly. In operation for over 100 years, food conglomerate J.M. Smucker built and acquired long-lasting, recognizable brands building a rich history in the process.
In fact, the Smucker family remains heavily involved and invested in the company. Four members of Smucker’s board of directors harbor the Smucker name. Two of those The J.M. Smucker Company (NYSE:SJM)’s, Timothy Smucker and Richard Smucker still own roughly 2% of the company a piece, according to its latest proxy. You always want to invest in a company where the management and employees share in the risks and rewards of the business. They will take pride and better care of the company under their watch.
Over the past five years The J.M. Smucker Company (NYSE:SJM)’s revenue and free cash flow grew 157% and 111% respectively. Smucker’s shareholders experienced a 107% return for its shareholders versus 15% for the S&P 500, not including dividends, over the past five years according to its investor relations website.
Smucker’s international segment experienced the most growth this year growing 35%. Its U.S. consumer foods division increased 6% year to date due to price increases, increased volume in certain products such as Jif peanut butter, and wider distribution in product lines such as Smucker’s Uncrustables. International expansion and product innovation will continue to drive this company forward.
Continuing on your journey through the cupboard, you may find Hunt’s ketchup, Orville Redenbacher’s popcorn, and Pam cooking spray all representing iconic brands made by food manufacturer ConAgra Foods, Inc. (NYSE:CAG). In addition, ConAgra makes Peter Pan peanut butter and Parkay margarine.
Over the past five years, ConAgra Foods, Inc. (NYSE:CAG) grew its revenue and free cash flow 10% each over the past five years. The company provided its shareholders with a market beating return of 50% versus an S&P 500 return of 15%, not including dividends, according to its website.
ConAgra Foods, Inc. (NYSE:CAG) operates in two segments: Consumer and Commercial foods. The Consumer and Commercial foods segments increased 7% and 1% respectively in the most recent quarter, perhaps as a result of the cash strapped consumer eating out less and cooking in more. In addition, the soft Asian economy contributed to its weakness in the commercial arena. ConAgra Foods, Inc. (NYSE:CAG)’s strong portfolio of brands will contribute to future shareholder prosperity.
On the whole, these companies operate in a needed industry backed by iconic brands and high barriers to entry. These companies should provide excellent research ideas and deserve a place on your Motley Fool Watch List. Happy researching!
The article Building a Watch List From Your Kitchen originally appeared on Fool.com and is written by William Bias.
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