Between 2006 and 2012, the U.S. projected GDP growth was 1.1%, according to The Conference Board. Emerging and developing economies growth came in at 6.5%, with the world average at 3.5%. While the U.S. has been a leader in the past for economic development, U.S. investors should not ignore the fact that other markets will experience greater growth going forward. One way investors can invest in emerging and developing markets without the difficulty of having to research foreign stocks is by buying U.S. stocks with a strong international presence.
Stable and familiar
Visa Inc (NYSE:V) is an international payment-processing company that is deriving revenue from more than 200 countries and territories. Visa is a very recognizable brand in the U.S. that has a long history and track record of revenue growth and stock performance. By 2015, Visa has a goal to earn 50% or more of its revenue from international markets. From 2011 to 2012, Visa Inc (NYSE:V)’s international revenue grew 16%. Even with a 16% growth rate year-over year, there is still a significant opportunity for even higher growth rates.
According to Visa, in 2012, 80% of transactions in Russia were done with cash. One of Visa Inc (NYSE:V)’s strategies is to increase the amount of merchants that accept Visa. In 2012, Visa launched a relationship with Russia’s largest grocery chain that has over 5,000 stores. With this new relationship, Visa is now accepted at the four largest retail-food chains in the country. With the added convenience and benefits of using credit and debit cards, Visa Inc (NYSE:V) should not disappoint in international revenue growth. This will enable U.S. investors the ability to invest in a stable and familiar stock with a strong international presence.
Room for growth
Colgate-Palmolive Company (NYSE:CL) is a consumer products stock that is a well-known U.S. company, with revenue coming from 223 different countries and territories. It operates in two different segments: pet nutrition and oral, home care and personal. Colgate-Palmolive Company (NYSE:CL) ranks number two on the Kantar Brand Footprint chart, second to The Coca-Cola Company (NYSE:KO) . Although it ranks second, it has the highest penetration rate. In 2012 approximately 80% of its net sales were generate outside the U.S. and over 50% of its net sales came from emerging markets.
Although Colgate-Palmolive Company (NYSE:CL) already has 80% of its net sales from outside the U.S., there is still room for strong growth. For year-end 2012, its sales growth in North America was 3.5%, in Latin America 10.5% and Greater Asia/Africa 11% for is oral, personal and home-care segments. Even with including growth in Mexico, its North American growth rate is still around three time less than Asia/Africa and Latin America. As the world population grows and desires a higher quality of life, something as simple as toothpaste will see strong demand.