We recently did a Top 10 Favourite Canadian Companies. This time, we’re looking at the beloved companies that have brand recognition across the world. These corporations have operations across the globe and are leaders in their domain. Their balance sheets are good and make great long-term investments. They also usually pay a dividend. Most of them are considered blue-chip stocks.
Blue-chip stocks are highly respected and widely known, publicly-traded companies. These well-established stocks are thought to be financially sound and are generally less volatile. Household names such as Coca-Cola Company (KO-N), Microsoft (MSFT-Q) and many others are examples of blue-chip stocks. The Dow Jones Industrial Average is a good example of an index that follows blue-chip stocks.
Here are the world’s most recognized brands to buy in 2019:
Tiffany & Co. New (TIF-N)
The Tiffany blue is known to set a flutter in the hearts of many across the world. The famed New York jeweler is known for their luxurious diamonds and sterling silver. They’ve performed well over the last quarters so it could be a good buy if you like the luxury sector.
Companies that recover from a recession first are 1) suppliers of necessities such as pipelines, telcos and utilities 2) blue-chip banks, insurers 3) consumer durables and 4) finally consumer luxuries.
Nordstrom Inc (JWN-N)
An American chain of luxury department stores. They’ve done well in implementing their e-commerce platform. Their stock has pulled back since their 52-week high of $67 but they recently got a rating upgrade. The management is known to give good guidance and is still a solid buy.
Walt Disney (DIS-N)
They are a leader in entertainment and have a strong global brand. They acquired 21st Century Fox last year which widened their content offering. Their newly announced streaming service has given a lift to their stock prices. A strong brand to buy and hold while taking a dividend yield of 1.6%.
In 5 years They're taking on Netflix with some fine programming, but he wonders how much room there will be in the streaming market as more players enter? More competition may pressure Netflix stock down the road. Disney has had a long-term peak of 4x adjusted book value historically. It's now above that ($131). As…
Ford Motor (F-N)
The fabled automaker is facing a transition in the auto market. Vehicles are moving from gas to electric. They do have some interesting models coming out but it’s a challenging time in a tough space.
This company always seems cheap, but he is concerned of where we are in the cycle of the auto business. Most of the world’s growth is in China and they don’t have a good foothold there.
Coca-Cola Company (KO-N)
A giant in the beverage sector. It’s also one of Warren Buffet’s favourite stocks. They pay a good dividend and is more of a defensive play. They’re diversifying from their core to sports drinks. They also bought a coffee company with potential for good growth. Analysts say that Coke has limited downsides and likely upside.
Valuation is a little stretched. There is a strong correlation between this and the US$. They generate a lot of sales outside the US, so when the dollar weakens, this does relatively well. They are trying to become less capital intensive, so are getting rid of some of their bottling operations. When they sell those…
Nike Inc (NKE-N)
An American multinational that’s a leader in activewear. Their nike footwear have dedicated fans and their recent entry into china was great. A globally well-managed company.
(A Past Top Pick Sep 14/16, Down 1%) He thought AMZN-Q was going to come in and that NKE-T would take better advantage of it, dealing more through AMZN-Q than they are, using them as a distributor. It is slow in coping but the stock seems to be fine. There is nothing wrong with the…
A leading food, snacks and beverage company. They’ve had some difficulty growing but they’ve diversifying away from the shrinking carbonated beverage category. More than 50% of their revenue now comes from other sources and they’ve bounced back.
Coca-Cola (KO-N) or PepsiCo (PEP-N) for a long-term investment? He doesn’t care for either. His choice would be Dr. Pepper Snapple (DPS-N). Carbonated beverage consumption is going down, so it is a race to try to diversify outside of that. Pepsi has done a better job of that. They have 22 brands and generates over…
Goodyear Tire (GT-Q)
They have new contracts, and are turning around the company. They announced good earnings and are rebounding. They have serious brand recognition in the sector and should grow long term.
Target Corp (TGT-N)
The department store that failed in Canada. Things seem to be coming back to normal after Christmas sales. Though it’s not the most compelling in its space, it enjoys lots of shoppers and is a solid hold.
(Top Pick July 8/14, Up 45.86%) Foreign exchange is part of it. He invested when he knew Canada would not do well. They are taking market share from Wal-Mart. The SU economy is growing by 4%.
Barbie, American Girl and Fisher-Price are under their belt and they have great brand power. The consumer discretionary sector is particularly harsh. They have brought in a new CEO in the last couple years to fix the situation and it could be a turnaround store. There have also been some talks of a takeover by Hasbro.
This has been a really tough stock. Has come under quite a bit of pressure. You would think it would be a lower beta name and it seems that all beta names have gone up. They have really suffered from low demand. Have all sorts of Frozen stuff, which is supposed to be in high…
Dunkin’ Brands Group (DNKN-Q)
The company known for their donuts. They also have Baskin-Robbins Franchises under their brands. They’ve had some volatility so do your homework. They are usually regarded in comparison to Starbucks.
The American clothing brand that also runs Old Navy and Banana Republic. They announced closing 230 stores and splitting off of Old Navy in 2020. They’ve experienced volatility due to restructuring but it’s still a solid long term hold.
The Japanese automaker and they’re vying to be the largest auto manufacturer on the planet. There’s been a slowdown in car sales but they’re one of the strongest auto companies.
Well-run company. Japanese automakers have been gaining market share at the expense of North American companies. Share price has done well, but not as well as the auto parts companies. This is a relatively cheap stock on a price-earnings basis, and this is as good a bet as any of the others.
The global coffee company that’s shaped coffee culture around the world. They’ve been stock market darlings and continue to innovate, but it’s pretty expensive. Wait for a pullback and hold for long-term.
A long-tome owner, despite this going sideways for a few years. China hasn't yet panned out, with some missteps. It opens a store every four hours around the world. Still likes it. They're working through mobile ordering. It will break-out. He's sticking with it.
Walmart Inc (WMT-N)
The big-box store that’s vying to be a leader in retail. They are facing harsh competition from Amazon. They’ve been effective in growing their online presence, and are competing well. It’s a more defensive choice and will do relatively well going forward.
The street loved this stock today with the best earnings reported in about 9 years. The fundamentals are still good for this stock. They dominate groceries in the US. However, Amazon may pose somewhat of a risk. He thinks there is room to go up a little more.
One of the most recognized brand across the world. The golden arches can be seen virtually anywhere in the world. They are well run and have good cash flow. They pay a good dividend.
Fast food is cyclical based on gas prices. Restaurant sales took off when gas prices plunged in 2014. Also, restaurant haven't seen earnings growth vs. other consumer discretionary spaces. He doesn't see a catalyst for this stock to improve. That said, it's had a good, long history and their foreign sales are a tailwind.
Estee Lauder (EL-N)
A giant in prestige skincare, makeup and other beauty products. It has a high price that’ll grow even higher still. They are expanding into Asia and they have great cash flow.
In 2010 they purchased a cosmetics company and doubled since then. The valuation is expensive and is on the 20s on a PE level. One step back along the supply chain is International Flavors Fragrances and (IFF-N) and is a better way to play it.
Macys Inc. (formerly Federated Department Stores) (M-N)
A well-known department store in the United States. They’ve been facing competition from Amazon and the contracting brick and mortar model. They have a lot of embedded capital and are still a stable company.
This is bottom fishing. It has had a nice pullback. His model price is $42, a 27% upside. Dividend yield of 4.46%.
Mastercard Inc. (MA-N)
One of the most used payment providers and has grown well. With the growing e-commerce and use of online payment, this will continue to grow. They’re focusing on emerging market, where there is potential for huge growth as well.
There is still lots of room for penetration in the credit card space in terms of the consumer not using cash but using plastic. You have to look at it long term. He feels there is still more upside. It's up 30% this year. V-N has a larger market share and has not had the…
Everyone who’s used a computer knows Microsoft and Windows. They have a great business model and they’re growing their cloud service. The move to software as a service that’s increased their rate of growth.
(A Top Pick Jun 08/18, Up 25%) Software service with a recurring membership fee is doing great. They are seeing 20% growth in revenues and he expects that to continue. Software is not in the cross hairs like semi-conductors and other computer equipment.
A high-quality company that’s a trillion dollar business. The iPhone has dominated the smartphone space and they’re growing their services. A high-quality company that will continue to grow.
Still migrating toward services, which have much higher profit margins. iPhone sales expected to drop about 10%, so the stock will probably move sideways this year. Service revenue is also more consistent. Long-term upside. Apple and Samsung really have the market cornered because of US restrictions on phones from China.
Hewlett Packard Enterprise Co. (HPE-N)
A leader in software services to other global corporations. They are extremely well run and earnings have been moving up. A solid investment since they have a good dividend, free cash flow and good future growth. They are also buying back shares so it could be a good chance to hop in.
HP-N was old tech. It split and HPE-N is up 40% in his fund already. Everyone is confused. This part is the cloud, security, etc. The old one is the contract manufacturer. HPE-N is at EBV whereas peers are multiples of this. 31% upside.
A tech stock that has proven to perform well and has shown consecutive growth. They have a new CEO. It is a good long term investment and it’s a good price right now. They pay a nice dividend.
Inexpensive at 15x earnings, and pays a nice dividend. But Intel hasn't been at the forefront of handheld devices or servers in the cloud business; Intel hasn't transitioned strongly from the PC world. A well-run company though, but look elsewhere for faster growth.
Visa Inc. (V-N)
The biggest credit card company in the world. They’re growing internationally, after buying Visa Europe. It has positive outlook with a good chart. The move away from physical money to virtual will help Visa’s growth.
It is hard to distinguish between itself and MA-N. It is one of the two largest in the world with great tailwinds. The US is still moving to payment cards.
A computer hardware, software, and cloud service company. They have been struggling to keep up with their competition though their chart is okay. They’re acquisition of Red Hat didn’t go well with investors but they have a buyback program and 5% yield, so it could be alright for a long term hold.
He started looking at it a week ago. He owns Microsoft and Apple in this space. Their latest earnings were not that strong. They don’t have the big growth engines like Microsoft. However, it is incredibly cheap. They are doing a lot with AI, and is at a level that is interesting.
Alphabet Inc. / Google (GOOG-Q)
Google is almost synonymous with the internet and large parts of the web are accessed through it. They don’t pay a dividend, but have immense growth potential as leaders in multiple domains. With assets like Youtube, Google Home and Android, they are well diversified.
The pending announcement of a potential investigation creates an interesting entry point. There is still a lot of growth opportunity. It make take years on the regulatory front. With over $100 billion in cash, the equivalent of $150 per share, they will be able to weather any storm. Yield 0%. (Analysts’ price target is $1325.44)
Exxon Mobil (XOM-N)
A multinational oil and gas corporation that provides good value to investors. They’ve been hit over concerns that the market is moving away from carbon fuels. As with other energy stocks, it’s been pushed down, but with a 4% dividend yield, you can get paid to wait.
(A Top Pick May 19/16. Down 7.16%.) Sold this earlier this year. Expects we will be range bound in WTI for the rest of the year. This one is okay, but at this stage, it may not have the leverage if oil prices move up.
3M Co. (MMM-N)
A industrial giant that’s a quality business. It’s been very consistent through the years and has different lines of businesses. They’ve been hit with the trade-tensions. They pay a healthy dividend of 6% so you’ll be paid to be patient on this one. Generally a good long term hold.
(Market Call Minute.) A decent holding for a long-term portfolio. They have just been under a lot of price competition and margins have saturated a little bit, because of a lot of FX exposure.
An international courier delivery company. If you’ve shopped online, there’s a good chance it was shipped through FedEx. Amazon and other e-commerce needs someone to ship their orders and FedEx has profited well from that though Amazon is now entering deliveries.
The lower price is not due to competition from AMZN-N. AMZN-N is 1 to 2 percent of revenues for FDX-N. Most of the headwinds have been trade related which are unwarranted because the US revenue from Chin is only 2%. They are having issues integrating their TNT express acquisition in Europe. If you ignore Ecommerce,…
United Parcel Services (UPS-N)
The trade war brought them down last year but it’s a good company. However, they are better positioned to deal with an economic slowdown. They too have been facing pressure from Amazon over deliveries.
Has avoided this, but can see why people are interested. There is the view that the post office is going to have to raise package delivery prices. However, the discussion that is important is the complete change in logistics Amazon has created. Feels this and Federal Express are organized around the idea of hubs and…
American Airlines Group (AAL-Q)
One of the biggest airline carriers, They pay a dividend so you get paid while holding long term. They’ve been moving sideways for a while and they’re in a tough sector.
Feels there is a trading catalyst to own an airline here. There has been some consolidation in this space. Traditionally these are not well run businesses but there is less capacity now, fuel is moving up and surcharges can be passed on. If they can manage those earnings and can guide the street conservatively, a…
The leading telecommunication company in the US. They’re implementing 5G and are considered lower risk than other telecos. They have a lot of recurring payments from contracts so they have stability. Their dividends are considered to be stable.
Looks a little bit like a value trap. A competitive business. Subscriber growth is flattening out. The company keeps on adding debt every year. There is not a lot of dividend coverage. Not a fan of the sector. (Analysts’ price target is $34.35)