A Georgia man claims he found a 1943 recipe used to make the soft drink Coke at an estate sale. He has offered to sell the document for $15 million. It hasn’t been confirmed to be authentic and no one has expressed interest in purchasing it yet. The drink’s maker, The Coca-Cola Company (NYSE:KO), claims that the original recipe is stored in a safe place at its Atlanta headquarters.
How much should the recipe for the signature product made by one of the world’s most valuable and recognizable brands be worth? Probably a lot more than $15 million. In 2012 the The Coca-Cola Company (NYSE:KO) brand name was estimated to be worth over $74 billion, ranking number six on a list tabulated byBrandZ.
The company has bottled and canned billions of the sugary soft drinks since it was first sold in an Atlanta drug store 127 years ago. Driven by the availability of over 500 products in all but two countries in the world it is estimated that the company now has sales of over $125 million per day, up from a single dollar in 1892.
And the revenue is increasing along with the stock price, earnings and the dividend at a fairly robust rate considering relatively slow worldwide economic growth.
The Coca-Cola Company (NYSE:KO) still remains a driving force in business after all these years. The stock will be probably still be a good bet for a long time.
Fast food pays
Ranked fourth on the list with a brand worth $95 billion was McDonald’s Corporation (NYSE:MCD). Who wouldn’t recognize the Golden Arches after exiting the interstate highway searching for a quick bite to eat?
McDonald’s Corporation (NYSE:MCD)’s is a good stock to have in the income-producing portion of your portfolio.
Big data
Maybe somewhat surprisingly, International Business Machines Corp. (NYSE:IBM) was second on the top brands list.
The world’s most innovative company (as measured by the highest number of patents issued every year since 2000) is worth nearly $116 billion according to BrandZ.
In the past the company was primarily a high-tech manufacturer of such items as the “IBM-compatible” PC. International Business Machines Corp. (NYSE:IBM) has since reinvented itself lately as mostly a provider of software and business services to other companies. The company is the world’s largest “Big Data” cruncher.
It has also been heavily involved in financial engineering since the turn of the 21st century. International Business Machines Corp. (NYSE:IBM) has repurchased and retired about a third of its outstanding shares. This has the effect of making the remaining shares more valuable and increasing earnings per share.
While sales have only grown about 1% to 2% per year, International Business Machines Corp. (NYSE:IBM) has posted double-digit earnings and dividend growth rates in part due to that buyback program.
However, the company (and most analysts) do recognize the fact that International Business Machines Corp. (NYSE:IBM) will have to eventually deliver on the top line as well.
All-in-all “Big Blue” is probably a keeper in most portfolios assuming it can grow revenue in the future.
Take a bite out of this Apple
By far the world’s most valuable brand belongs to Apple Inc. (NASDAQ:AAPL).
Selling countless millions of iPods, iPhones, iPads and iMacs results in a $182 billion value for the Cupertino, CA based company, started in Steve Job’s parents garage in the 1970’s.
The figure is higher than the market cap of all but 22 companies in the world and the GDP of 46 countries. Apple Inc. (NASDAQ:AAPL) is a financial powerhouse.
It has had a lot to overcome over the last year, including a falling stock price after a meteoric rise over the previous five-year period. Investors are slowly realizing that the huge growth rates of the past will not be sustainable in the future. It appears that Apple Inc. (NASDAQ:AAPL) is transforming itself into a stalwart or rule maker that will start to share some of its huge cash pile with investors.
Apple Inc. (NASDAQ:AAPL) recently announced an enhanced stock buyback plan and dividend increase that will reward loyal shareholders with upwards of $100 billion over the next few years. It is borrowing money to fund the plan and will take on some long-term debt for the first time in many years.
It will probably be worth owning a few shares and getting on the bandwagon just to collect the juicy quarterly payouts.
Conclusion
Having a well-known brand name can be worth many billions of dollars for companies that provide great products and services and generate lots of cash. Those businesses return that value to their shareholders in the form of price appreciation, stock buybacks and dividends. The BrandZ list is a good place to start searching for the best companies.
And for those interested in obtaining the 1943 recipe for Coke from the Georgia man who claims he has it, I would instead recommend buying The Coca-Cola Company (NYSE:KO) stock. At least you know what you will be getting: rich.
Mark Morelli owns shares of Apple, International Business Machines., Coca-Cola, and McDonald’s. The Motley Fool recommends Apple, Coca-Cola, and McDonald’s. The Motley Fool owns shares of Apple, International Business Machines., and McDonald’s.
