Ralph Lauren
This iconic retailer broke into the world’s top 100 most valuable brands in 2012. According to interbrand.com, the Ralph Lauren Corp (NYSE:RL) brand itself is worth over $4 billion. Investors who identified the potential of the company and its strong brand profile early on have been richly rewarded. Over the last ten years, the stock has climbed better than 760% and currently is sitting near new all-time highs.
Even at today’s prices, Ralph Lauren is a compelling long-term investment. The business is straightforward, steady, and generates large amounts of cash. It is also experiencing significant operating momentum, highlighted by a very impressive jump in revenue in fiscal 2012.
Furthermore, at its current valuation, and with a dividend yield of a little less than 1%, the stock continues to look like a solid bet. Both the stock’s P/E ratio and PEG ratio are below its sector average. Its forward P/E of 19 certainly seems reasonable for such a high quality company with a track record of creating shareholder value.
Deere & Co.
This is another iconic brand which saw significant momentum in 2012. Interbrand.com estimates that the John Deere brand added 16% in value last year with a valuation of around $4.2 billion. Even more interesting is the fact that Berkshire Hathaway became a shareholder in the Moline, Illinois-based company last November. According to Berkshire’s most recent 13-F filing, which highlights its long equity positions, the stake was valued at around $344 million at the beginning of 2013.
Deere & Company (NYSE:DE) is the world’s largest maker of agricultural equipment. As such, the business meets the criteria of not being overly complicated or difficult for the average investor to understand. The company’s management team has also cultivated a long-term track record of creating shareholder value. Over the last ten years, the stock has climbed around 345% and the company has paid its shareholders a dividend every quarter.
Given the quality of the business, Deere’s growing brand footprint, and a dividend yield above 2%, the stock continues to look inexpensive. The shares trade at a trailing P/E of around 11, a forward multiple 10, and a PEG ratio of 1. At these levels, investors should seriously consider following Berkshire’s lead into Deere & Company (NYSE:DE).
Although the four stocks highlighted above may not make investors fabulously wealthy over the short-term, there is a good chance that these names will continue to trounce the market in the coming years. They make attractive investments due to their strong (and growing) brand moats, successful and straightforward business models, and reasonable valuations.
The article Invest Like Warren Buffett: 4 Top Stocks With Highly Valued Brands originally appeared on Fool.com.
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