By Scott Rubin
One of the things that legendary investor Warren Buffett looks for in his stock picks is what he calls a moat, meaning some quality or qualities that protect a company's business from encroaching competition. One of the most common and lucrative moats is a tremendous brand which is instantly recognizable and inspires consumer loyalty.
Over the years, betting on great brands has paid big dividends for long-term investors. Below are 4 stocks Benzinga believes has tremendous brand value and are exhibiting strong momentum in the current environment.
McDonald's (MCD) - This stock has been an incredible long-term performer, and last year was no different. Over the last year, shares are up 32%. The stock is also offering a very healthy 2.84% yield at current levels.
McDonald's is one of the world's most recognizable brands and its competitive moat is second to none. Its shares may be a little pricey, but over the long run this company should continue to generate wealth for its shareholders. McDonald's currently trades at a trailing P/E of 19.33 a forward P/E of 15.57, and a PEG ratio of 1.76 at current levels.
Nike (NKE) - This company is in a sweet spot - its small enough to continue to post solid growth, while at the same time having a globally recognized, leading brand. Nike shares have appreciated more than 22% over the last year and remain in a strong long-term uptrend. The stock trades at a trailing P/E of 21.97, a forward P/E of 17.55, and a PEG ratio of 1.70. Shares yield 1.42% at current levels.
Macy's (M) - This retailer is experiencing strong operational momentum in the current environment and the stock is up more than 40% over the last year. The company's iconic brand provides the business with a strong competitive moat, and the future continues to look bright. The stock trades at a trailing P/E of 12.30, a forward P/E of 10.39 and a PEG ratio of 1.08. Macy's is currently yielding 2.39%.
Starbucks (SBUX) - Another iconic global brand, Starbucks still has room to grow. Over the last year, Starbucks shares are up 42% and are in a very strong uptrend. The stock trades at a trailing P/E of 29.07, a forward P/E of 21.12, and a PEG ratio of 1.48. Starbucks shares are yielding 1.44% at current levels.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Disclaimer: Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.
