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, VIN COLBY (6 clicks)
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How do you measure the power of a brand? It's a crucial combination of financial value and positive consumer sentiment.

The winners on Forbes' inaugural list of the world's most powerful brands have plenty of both.

In assembling the current rankings, Forbes started with a universe of more than 200 global brands. To be considered, a brand had to have more than a token presence in the United States, which eliminated some big brands, such as Spanish retailer Zara, and telecom China Mobile (CHL).

Forbes valued each brand on three years of earnings and allocated a percentage of those earnings based on the role that brands play in each industry -- high for luxury goods, for instance, and low for airlines. The average price-to-earnings multiple over the past three years was added to these earnings to arrive at the final brand value.

To gauge consumer attitudes, Forbes turned to Landor and PSB to survey 2,000 global consumers on 130 brand names valued at $2.5 billion or more. They measured perceptions of the brands on a dozen attributes. Forbes then combined the brand values with the consumer study in making its rankings.

Go to Forbes.com to see the rest of the list.

BRAND

CURRENT DIVIDEND YIELD (%)

CONSUMER PERCEPTION RANK

COMMENTARY

10.

Cisco Systems (NASDAQ:CSCO)

2.96

15

Cisco Systems' "Human Network" ad campaign shows how people connect in sports, entertainment, the workplace and the community. It has helped make Cisco a household name and brand.

9.

BMW(OTCPK:BAMXY)

3.83

5

Consumers rate automaker BMW highest among brands on "high-quality products and services" and fifth overall. The "ultimate driving machine" is the global sales market leader for luxury vehicles.

8.

General Electric (NYSE:GE)

2.97

49

General Electric's reputation and market value have been dented over the past decade, but the conglomerate continues to be a force in industrial sectors and remains an iconic brand.

General Electric is the only company in the original Dow Jones Industrial Average, founded 1896, that is still a part of the index today.

7.

McDonald's (NYSE:MCD)

3.36

85

McDonald's scored poorly with consumers, but with more than 33,500 restaurants serving 68 million people in 119 countries each day, McDonald's boasts a brand with a financial value that's among the highest of any company.

6.

Intel (NASDAQ:INTC)

4

6

Intel scores both with consumers and on its financial strength. The Silicon Valley stalwart generated $17.5 billion in earnings before interest and taxes in 2011. It was also the top-rated brand among men, based on perception, in a global survey by Landor.

5.

Google (NASDAQ:GOOG)

0

7

You know a brand is powerful when it becomes the generic term for the category, as Google has in Internet searches.

But the company separates itself from brands like Kleenex and Xerox by the amount of money it generates. Google earned $12.2 billion in earnings before interest and taxes in 2011.

4.

IBM (NYSE:IBM)

1.62

20

IBM and its brand were in a death spiral in the early 1990s, with the company perceived as a tech-hardware dinosaur. Over the past two decades, however, IBM has reinvented itself as software and services giant.

3.

Coca-Cola (NYSE:KO)

2.64

29

Coca-Cola is fighting an uphill battle in the United States as soda gets part of the blame for the nation's obesity problem. Still, the company sold 26.7 billion cases of soda worldwide in 2011.

Famed investor Warren Buffett owns the biggest stake in the company, worth $15 billion, through his investment vehicle Berkshire Hathaway (NYSE:BRK.A)

2.

Microsoft (NASDAQ:MSFT)

3.09

1

Surprise! Microsoft gets the highest consumer perception scores in a global survey of 2,000 adults. (Microsoft publishes MSN Money.)

Consumers credit Microsoft on areas such as "positively impacting lives on a daily basis" and "addresses my unique needs."

The value of the brand is down 3% over the past two years, though, which keeps it ranked No. 2 overall.

1.

Apple (NASDAQ:AAPL)

1.66

11

In the perception study, global consumers give Microsoft higher marks, but Apple has a significantly higher brand value. That's enough to make it the world's most powerful brand.

Now, what is a dividend investor in the mold of Warren Buffett to do?

He or she should discard all the technology companies in this list because it is hard to predict their future.

He or she should discard BMW because the company's high capital requirements eat big time into its FCF (Free Cash Flow). Buffett has never owned an auto maker either.

He or she is left just with McDonald's and The Coca-Cola Company, of which McDonald's has a higher FCF/dividend coverage ratio of 1.75 vs. Coca-Cola's 1.65.

Of all the technology companies, Google is currently the worst because it pays no dividend.

Source: Buy McDonald's, Sell Google