Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Mead Johnson Nutrition CO (MJN), The Coca-Cola Company (KO): The 5 Most Profitable Products on the Market

Page 1 of 2

Many of the top U.S. companies derive a significant portion of their revenue and profit from only one or two products. In this article I’ll take a look at the top five products as ranked by one gauge of profitability — operating margin — and how those products affect the businesses that market them. The list was compiled by 24/7 Wall Street.

Baby formula

Mead Johnson Nutrition CO (NYSE:MJN)

Ranked number five is Enfamil, which is distributed by Mead Johnson Nutrition CO (NYSE:MJN). Sales of the baby formula add $2.3 billion in annual revenue to the top line. After subtracting costs the operating margin works out to be 24%. Overall margin growth at the company has been flat recently. The product has 15% of the market share.

Baby formula is in a growth phase in some emerging markets, and in China, it is exploding. Expect continued earnings growth for the company going forward (it has averaged 17% over the last few years) if the company can maintain or increase the margin going forward.

Higher earnings may also allow the company to keep increasing its dividend, which they have been doing since 2010.


Let’s move up on the list to number four. The world’s top-selling soft drink, Coca-Cola, has an operating margin of 25%. Margins have been stable over the past few years. The product is distributed by The Coca-Cola Company (NYSE:KO). The Atlanta-based company sells $14.3 billion worth of Coke annually and controls 42% of the market.

With the world-wide market for sugary soft drinks expanding at a steady rate, expect earnings to grow as well because of the wide moat that the drink provides. Coke is the sixth most recognized brand name on the planet.

The cash flow Coke produces allows the company to regularly grow its dividend and buy back shares. Investors are rewarded every quarter with a payment of $0.28 a share.

The third most profitable product is another drink. Monster Energy has an operating margin of 27% which has also been stable recently. The high octane beverage provides nearly $2 billion towards sales for Monster Beverage Corp (NASDAQ:MNST).

The relatively new product, introduced in 2002, has helped drive strong double-digit revenue and earnings growth for the company. The key question is whether the trend will continue. The company needs to deal with a couple of issues: a backlash against the drink from consumer groups and the media and increasing production costs. If it succeeds then expect Monster to maintain the high operating margins and earnings growth.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!