5 Large Cap Super Stocks with Great Earnings

In October, 2008 when the world was going to end as far at the stock market goes I wrote an article for another website discussing 5 large cap stocks. My hypothesis is that these companies are so well run and know so much about their markets that they will continue to grow their earnings. The last two earnings periods and now the current one continue to provide proof of my hypothesis.

As we roll into the 2nd quarter earnings season, several of the 5 have reported earnings already. The list:

Apple, Inc. (AAPL) Apple reported earnings on Tuesday that were 15% higher than the same quarter last year. The $1.35 per share net beat the estimates by 18¢. Apple just keeps making products people want to buy and gets premium prices for them. (Call Transcript)

The Coca Cola Company (KO) Coke is a monster when it comes to selling its products around the world. Earlier this week the company reported profits 43% higher than a year earlier. Coke earned 88¢ per share compared to 61¢ for Q2, 2008 and 65¢ in the first quarter of 2008. 80% of the company’s sales are outside of the U.S. and think about how much Coke products Americans drink. (Call Transcript)

Google, Inc. (GOOG) continues to grow profits despite the economic slowdown everywhere. For the 2nd quarter Google had revenues 3% higher than a year earlier (remember the 2nd quarter of 2008, GOOG was $580 per share). Net income increased by 74¢ to $4.66 per share. (Call Transcript)

IBM Corp. (IBM) had reinvented itself from a hardware company to a service contract provider. Revenues and earning move steadily upward. As one headline put it, “IBM is a Profit Machine“. 2nd quarter earnings of $2.32 per share beat the estimates by 15% and were 18% higher than a year earlier. (Call Transcript)

McDonald’s Corp. (MCD) reports earnings Thursday and the estimate is 97¢ per share compared to earnings of 86¢ a year ago and 82¢ in the 1st quarter of 2009. Let us see how the company does.

These companies continue to grow their businesses and surprise the experts. Take a look at what the market did to their stock prices in November and March. Walmart (WMT) is another company close to making the list. I like to research and own small cap stocks, but these companies will treat long term investors well and we can all learn from the success of superior business plans put into action.

Disclosure: No position

Comments

[oilsands:]

Another good article. thanks for the perspective, Tim.

Jul 23 12:58 PM

[Jake2:]

McDonald's down 5%+ as of 1:45PM eastern. Another analyst bites the dust.

Jul 23 02:09 PM

[Jake2:]

PS: Profit on MCD down 8%. Somebody didn't do their homework.

Jul 23 02:13 PM

[Mel Shapiro:]

Tim left out PM. Market Cap: 91.01B, P/E (ttm): 14.23, EPS (ttm): 3.26, Div & Yield: 2.16 (4.90%)
PM is a 90 billion dollar cap co. selling a highly additive product, addictive to both pleasure seeking users and tax hungry governments, to customers outside the USA. PM is a good play on foreign currency, third world/emerging market growth, and a growth stock with a dividend in the 5% range.

Jul 23 03:27 PM

[FRANJUST62@...:]

Tim: Our entire investment club follows you daily.Please consider some energy stock data i.e. APL-ATN-SPFGP-APU ETC. Many of us are into these stocks but rarely find any mention.

Jul 23 07:25 PM

[mind_geek:]

Coke is at the same price it was 13 years ago. IBM 10 years...no change. Why do people keep recommending these stocks that do nothing over time? You would have doubled the return of these companies just owning a CD with zero the risk. They are great companies mind you...but they just wont make you any money. Its not your grandma's stock market anymore.

Apple and Google are terrific momentum trading vehicles (both up and down). I would bet however that 10 years from now the prices will be right where they are today. This is a traders market and probably will be for another 3 years..or until we start employing people again.(ha)

Jul 24 01:17 AM

[FRANJUST62@...:]

Your correct. But it depends what type of an investor you are. If you are loking for growth you are right. But, if you are looking for income via dividends Coke never stops paying like many others. As mentioned our investments don't monitor up/down stock price just the est annual income the re-invested dividends produce.


On Jul 24 01:17 AM mind_geek wrote:

> Coke is at the same price it was 13 years ago. IBM 10 years...no
> change. Why do people keep recommending these stocks that do nothing
> over time? You would have doubled the return of these companies just
> owning a CD with zero the risk. They are great companies mind you...but
> they just wont make you any money. Its not your grandma's stock market
> anymore.
>
> Apple and Google are terrific momentum trading vehicles (both up
> and down). I would bet however that 10 years from now the prices
> will be right where they are today. This is a traders market and
> probably will be for another 3 years..or until we start employing
> people again.(ha)

Jul 25 09:16 AM