For changes to be of any true value, they've got to be lasting and consistent.
Tony Robbins
Expert motivator Tony Robbins knows that what is worthwhile lasts and non-cyclical consumer stocks can be steady performers when trouble brews in the markets. We think Tony, or any investor, should consider buying these steady, reliable, and consistent non-cyclical consumer companies: (All Sources: Google Finance)
The Coca-Cola Company (KO)
The Coca-Cola Company is a beverage company. The company owns or licenses and markets more than 500 nonalcoholic beverage brands, primarily sparkling beverages but also a variety of still beverages, such as waters, enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports drinks. It owns and markets a range of nonalcoholic sparkling beverage brands, which includes Coca-Cola, Diet Coke, Fanta and Sprite. The company's segments include Eurasia and Africa, Europe, Latin America, North America, Pacific, Bottling Investments and Corporate. On December 30, 2011, the company acquired Great Plains Coca-Cola Bottling Company (Great Plains) in the United States. During the year ended December 31, 2011, the company acquired the remaining interest in Great Plains and Honest Tea, Inc. (Honest Tea). In December 2011, the company acquired an additional minority interest in Coca-Cola Central Japan Company (Central Japan).
Coke is the poster-child for two things: the effectiveness of branding and non-cyclical consistency. A tasty beverage goes for one price, but a tasty beverage that says "Coke" (or one of the many other valuable brands Coke has) goes for significantly more. Coke does a lot of advertising, and it works. Coke's brands are known and loved around the world and that goes directly to the bottom line.
The other thing Coke is a shining example of is consistency. People tend to stock the 'fridge with beverages whether the economy is up or down. Coke has capitalized on this so well that it has managed to raise its dividend every year for fifty years in a row. Yes, fifty straight years of dividend increases. That consistency is the definition of being unfettered by economic cycles.
In uncertain economic times people tend to flock to the non-cyclical stocks and that is what's happened here. Coke has been on a steady climb upward seemingly forever. Coke really has never been cheap since the 2008 crash and that seems like ancient history for this stock as it has made new high after new high. Coke's brand is so strong and its business so steady that it may not pull back before heading even higher. Right here could be the place for Tony Robbins to pull the trigger on this consistent stock.
Colgate-Palmolive Co. (CL)
Colgate-Palmolive Company (Colgate) is a consumer products company. The company's products are marketed in over 200 countries and territories worldwide. The company operates in two product segments: Oral, Personal and Home Care; and Pet Nutrition. Colgate's Oral Care products include Colgate Total, Colgate Sensitive Pro-Relief and Colgate Max Fresh toothpastes, Colgate 360° manual toothbrushes and Colgate and Colgate Plax mouth rinses. Colgate's Oral Care business also includes dental floss and pharmaceutical products for dentists and other oral health professionals. Its Personal Care products include Palmolive, Softsoap and Sanex brand shower gels, Palmolive, Irish Spring and Protex bar soaps and Speed Stick, Lady Speed Stick and Sanex deodorants and antiperspirants. The company's Personal Care business outside the United States also includes Palmolive and Caprice shampoo and conditioners.
What could be more consistent than deodorant and toothpaste? Not a whole lot. Just like Coke, Colgate's strong brands and the consistent nature of its business have meant that its stock has climbed ever higher for years now, only taking a small break in the 2008 crash. There are precious few stocks that have performed as steadily as Colgate. It may not give Tony a pullback so now looks like it might be a good time to take the plunge. Plus, if you have teeth as big and white as Tony Robbins you probably spend thousands of dollars on toothpaste each week so its nice to have some of that come back to you.
Philip Morris International (PM)
Philip Morris International Inc. (PMI) is a holding company. PMI's subsidiaries and affiliates and their licensees are engaged in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States of America. Its products are sold in approximately 180 countries. The company divides its markets into four geographic segments: The European Union (EU) Region, The Eastern Europe, Middle East & Africa (EEMA) Region, The Asia Region and The Latin America & Canada Region. In June 2011, it completed the acquisition of a cigarette business in Jordan, consisting primarily of cigarette manufacturing assets and inventories. January 1, 2011, it established a business structure with Vietnam National Tobacco Corporation (Vinataba) in Vietnam, further developing its joint venture with Vinataba through the licensing of Marlboro and establishing a PMI-controlled branch for the building of its brands.
We said not much could be steadier than the toothpaste and deodorant industry, but addictive products could rival that. If someone has a conniption when they don't have your product then you are on to something. Tobacco has been good to PM and like the cola game a smoke that says Marlboro commands a loyal customer and higher price globally. Morris was spun off from Altria (MO) in March of 2008 and has been rising steadily since, up almost 75%.
(Source: Yahoo Finance, click to enlarge)
Add to that the fact that the dividend is up by more than 50% since 2008 and currently yields 3.58%, about a point higher than Coke or Colgate. This is very likely because being a tobacco company Morris is a "sin stock." This is a reason for some investors not to buy the stock but it is also an opportunity with that higher yield. We'll leave it up to Tony on that one but this looks like a good place to pull the trigger as the mostly-up Morris has held in place since March. Inevitably, smoke rises higher.
Conclusion
- Coca-Cola is one of the strongest brands in the world, operates in a beverage business that can thrive in a down economy, and has raised its dividend for fifty years in a row
- Colgate Palmolive sells products that are always in demand regardless of the economy, has brands that are some of the strongest in the industry, and its stock has been one of the steadiest risers in the entire market
- Philip Morris sells addictive products and has one of the most loyal customer bases of any company in the world, probably yields an artificially high amount due to its "sin stock" status, and its stock has taken a breather for the last few months and could be giving investors a chance to climb aboard
Tony Robbins recognizes the value of consistency. Non-cyclical consumer stocks are some of the steadiest performers in the market and these three look like strong buys here for Tony or anyone.
Here are some other non-cyclical stocks to consider: Fomento Econ (FMX), Ambev (ABV), Anheuser-Busch InBev SA/NV (BUD), Pepsico, Inc. (PEP), British American Tobacco plc (BTI), Unilever plc (UL), Unilever NV (UN), Kraft Foods Inc. (KFT), Diageo plc (DEO), Starbucks (SBUX), Kimberly-Clark Corporation (KMB), General Mills, Inc. (GIS), Procter & Gamble Co. (PG), Reynolds American Inc. (RAI), Coca-Cola FEMSA S.A.B de C.V. (KOF), Estee Lauder Companies Inc. (EL), Ecolab Inc. (ECL), Archer Daniels Midland Company (ADM), Mead Johnson Nutrition Company (MJN), Kellogg (K), H.J. Heinz (HNZ), Lorillard (LO), Hershey (HSY), Brasil Foods S.A. (BRFS), Brown-Forman Corporation (BF.B), Sara Lee (SLE)
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
