Which Companies Have Pricing Power?

If a business can raise prices without losing customers, it tends to be rewarding for shareholders. That's a topic for this episode of the Motley Fool Money podcast as Motley Fool analysts Ron Gross and Jason Moser discuss:

• Disney's surprising 1st-quarter results in Parks and Disney+ subscribers.
• Peloton changing its leadership and tightening its purse strings.
• Affirm Holdings (AFRM 2.49%) accidentally tweeting its earnings results too early.
• Pepsi & Coca-Cola telling similar stories with profits and higher costs.
• Cloudflare gearing up for 2022.
• The latest from CVS (CVS -1.62%), Chipotle (CMG 1.07%), and Zillow (ZG 4.02%) (Z 3.29%).
• Two stocks on their radar: Brookfield Renewable Corp. and The Trade Desk.
• Plus, Bill Shea from The Athletic offers an advertising preview of Super Bowl 56 and discusses how streaming video platforms are influencing the ad-buying landscape in live sporting events.

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.

This video was recorded on Feb. 11, 2022.

Chris Hill: Which companies have pricing power, who accidentally tweeted out an earnings report during the trading day, and why should investors circle Feb. 18 on their calendars? The answers to those questions and more straight ahead. Motley Fool Money starts now.

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It's the Motley Fool Money radio show, I'm Chris Hill, and I am joined by Motley Fool senior analysts Jason Moser and Ron Gross. Good to see you both.

Ron Gross: How are you doing, Chris.

Chris Hill: We've got the latest headlines from Wall Street. We've got a closer look at the millions being spent on Super Bowl ads. And as always, we've got a couple of stocks on our radar. But we begin this week in the Magic Kingdom. Disney's first-quarter profits came in much higher than Wall Street was expecting, revenue from the parks segment was double what it was a year ago, and Disney+ added 12 million subscribers. Jason, always a lot to unpack with this company. What is the biggest headline to you?

Jason Moser: Feel the magic, Chris. Feel the magic. This report, I think really kicks 2022 off on the right foot for Disney. With top-line revenues up 34%, earnings per share $1.06, it roared back from a challenging year last year. The streaming business gets all of the headlines it seems these days, but to your question there, I think it was the parks business that was the attention-getter. That segment posted its second-best quarter of all time, revenue more than doubled from a year ago, and that sent operating income through the roof. Remember that with a business like Disney, there are a lot of fixed costs involved with keeping those parks open and the bills paid. So as traffic grows, they get more profitable. We saw that on display this quarter. But an interesting data point they noted in the call that I think it's just worth remembering here: Per capita spending, spending per person at the domestic parks, grew more than 40% versus the same quarter in 2019. Even more interesting, that's off of lower traffic levels than they saw in 2019. 

Which of course makes sense, but it just goes to show that they can really do a wonderful job of monetizing those parks when they can keep them open. And I feel like we're at the point now where they're going to be able to keep them open on a more regular basis. There may be some ebbs and flows there over the coming year, but again, they followed it up I think with very strong media and entertainment performance there. That revenue grew 15%, and you get into, really, the streaming numbers and that's what everybody wants to know. They finished the quarter with 196.4 million total subscribers. That means they added 70.4 million for the quarter, that included 11.8 million new Disney+ subscribers. That brings that total to 130 million Disney+ subs now. That's important. Because they set this goal, this target of 230 million to 260 million Disney+ subs by the end of 2024. I feel like we were probably all a little bit skeptical that they would be able to pull that off a year ago. I feel like now it's a bit more of a reasonable target. That's just 20% annualized growth over the coming three years. It feels like they've got things going in the right direction here.

Chris Hill: Ron, when they launched Disney+, it was with a lower price point. This is a business that historically has exercised pricing power. If they're not doing it with streaming, to Jason's point, they're certainly exercising it in the parks.

Ron Gross: Absolutely. What I love most about Disney is this great diversified revenue stream that does have pricing power across the board. But you've got Disney+ for those that stay home, you've got the parks for those who are going out, it's a great reopening play. Still trading in the low 30, 31 times earnings, but earnings are still depressed. You adjust for that, you're back into the 20 times earnings [range] for a really wonderful company. I'm waiting for them to reinstate the dividend. That'll be an important indicator to me that things are on track.

Chris Hill: What a week for Peloton. It started on Monday with The Wall Street Journal and Financial Times reporting that Amazon and Nike were interested in buying the company. Then on Tuesday, Peloton announced it is laying off 20% of its staff and replacing CEO John Foley with former Netflix and Spotify executive Barry McCarthy. Ron, where do you want to start?

Ron Gross: Boy, a lot to unpack. Quite the week. The stock up more than 50% for Monday, but still off 75% from its 52-week high. As we know, to give some context, sales during the pandemic skyrocketed. Company acquired Precor for $420 million. Management figured the gravy train was going to roll on -- a pretty major miscalculation that the business wouldn't take a major hit in a post-pandemic world. But as we're seeing, that's not the case. Company is seeing a sharp decline in customer demand as evidenced by this quarter's results, which they had outlined in a preliminary report in January. Guidance was well below expectations, which is what some investors are focused on.

But, as you mentioned, the stock did get a great big boost from rumors that maybe Amazon or Nike would acquire the company. I'm not seeing any real evidence of that quite yet. I'm counting these as rumors for now. I'm sure there will be people that come in and make an actual offer, but we don't know quite yet. Company announced some major changes that they're going to undertake. They were greeted favorably by investors, as you mentioned -- CEO John Foley, founder, stepping down. Barry McCarthy, CFO of Netflix and Spotify, will take over. Great credentials, but CFOs do not always make for great CEOs. It's somewhat of a different skill set. I'd imagine his job is to rightsize this ship rather than be the CEO for the next decade-plus. We'll see how that plays out. Finally, undertaking a sweeping corporate restructuring aimed at saving $800 million annually, laying off 2,800 workers, reducing marketing, rethinking their brick-and-mortar locations, reorienting their supply chain to use third-party providers. Lots of different initiatives underway to right this ship, make the cost structure appropriate for where it looks like the demand is going to be.

Chris Hill: Affirm Holdings was scheduled to report second-quarter earnings after the closing bell on Thursday, unfortunately someone accidentally tweeted out the results during the trading day, and shares of the "buy now, pay later" company fell more than 20%. Jason, how bad were these results?

Jason Moser: Itchy trigger finger will get you trouble, Chris. The results are good. Let's get that out of the way first. I think the key to understanding the potential here is in Affirm's mission, which is to deliver honest financial products to improve lives. I think the Affirm that we know today, as a "buy now, pay later" company, that shouldn't be the same Affirm that we see five years from now. I think the promise of this business is beyond just BNPL, and so it's worth keeping that in mind, but it was a good quarter. It can always be tricky to understand why the market may be selling something like this on any given day. It's worth remembering, Affirm doesn't make any money yet. They don't generate any cash flow yet. It's still valued at something like 15 times trailing sales. It's going to trade on sentiment, oftentimes. I think that really most of the selling is coming from the timing of revenue recognition. In this business, they are seeing a higher mix of interest-bearing transactions. And those interest-bearing transactions, that revenue is recognized over longer periods of time. 

You see the key performance indicators not quite lining up with revenue forecasts. That can create a little uncertainty there. But I don't think that's necessarily a problem. If we get to the numbers, gross merchandise volume for the quarter was $4.5 billion. That was up a 115%, well above their forecast from a quarter ago of $3.6 billion. They noted strength encouragingly in travel and ticketing. That was up 314% from a year ago. But if you look at total revenue, less transaction costs, that grew 93%, right in line with the high end of their forecast. Active merchants increased from 8,000 to 168,000. I know that sounds like a lot, Chris, and there's a good reason. They signed on Shopify, so they get a lot of those Shopify merchants. That's what is. But that's a good thing. You saw consumers grow 150% from a year ago, we're seeing transactions per active customer grow 15%. I think all in all, the business is headed in the right direction. The selling could be maybe a mix of either the itchy trigger finger and perhaps some questions on the revenue recognition. But all in all, I think the business continues to perform well.

Chris Hill: I have to say, in the increasingly automated world of investing, it's nice to see that there's still a place for human error. There's still a role to play.

Jason Moser: It's nice to see. You're right.

Chris Hill: Similar stories this week for two beverage giants, Pepsi and Coca-Cola reported strong fourth-quarter profits, but both companies warned about higher costs. Which, Ron, really seems like a refrain. We're going to be hearing from everyone in the consumer goods industry.

Ron Gross: Absolutely across the board, but those with pricing power aren't hurt as much as those without. Warren Buffett, one of the main reasons he likes Coke, besides the fact that he loves Cherry Coke, is that the company does have pricing power and so does Pepsi. Both companies did report higher sales as they were able to actually increase prices, but the higher cost from commodities, transportation, hurt the bottom line still. Coke's revenue increased 9%. That was driven by a 10% increase in prices. Revenue at Pepsi, which does include Frito-Lay's snack business, rose almost 12%, and that includes a 7% increase in prices. Both companies said inflationary pressures hit profits. Costs rose for trucking, agricultural commodities, packaging -- specifically aluminum in a pretty big way. Coke's operating income fell 28% for the quarter, Pepsi's operating income fell a little bit less, but did fall 9%. Both were actually better than expectations, which as we know, is typically what the stocks react to.

A couple of notes from management. Coke said the fourth-quarter of 2021 was the first period since the pandemic started that the volume of its sales in restaurants and other venues was ahead of 2019. Both companies that are trying to rightsize their portfolios. Coke is acquiring BodyArmor sports drink; Pepsi is selling their Tropicana juice business. I think we're going to continue to see pricing pressures and price increases from both companies for the rest of the year.

Chris Hill: Have you seen the lineup for Pepsi's halftime show at the Super Bowl?

Jason Moser: Impressive.

Chris Hill: I can't wait. Coming up after the break, we've got the latest on cybersecurity, consumer health, and most importantly, burritos. Stay right here. This is Motley Fool Money.

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Chris Hill: Welcome back to Motley Fool Money. Chris Hill here with Jason Moser and Ron Gross. Nice week for web security company Cloudflare. Fourth-quarter profits in revenue came in higher than expected. Jason, the past 12 months have been a bit of a roller coaster for this business and this stock. How is 2022 shaping up for Cloudflare?

Jason Maser: Based on this report, I think it's shaping up quite nicely. This was another very encouraging quarter that shareholders should feel good about. If you're not a shareholder, it's not too late either. Don't feel like you've missed the boat on this one because it's a big market opportunity they're pursuing, but they outperformed their internal guidance. Fourth-quarter revenue totaled $193.6 million, that was up 54% from a year ago. They recorded a dollar-based net retention rate of 125% -- that set a record for them. It was up 600 basis points from a year ago. Not only they're keeping their customers, but they're developing those relationships, they're growing those relationships, those customers are spending more. I think another very encouraging side, they're free cash flow positive for the quarter, which was a nice little bonus here. They have a very much a Jeff Bezos mentality with this business, and reinvesting in it, even if management holds what would appear to be a little disdain for AWS and it's pricing strategies. 

But generally speaking, I think all things look great. I have to tip my cap to them. A little shout out to "Bill and Ted" in the earnings release is always well-received, Chris, and Matthew Prince said, "We had a most excellent 2021 capping off the year with fourth-quarter revenue growth, yada, yada, yada." That was fun to see, but they added 156 new large customers. Those are the customers that spend more than $100,000 per year, so that brings the total to 1,416. That's up 71% from a year ago, and they saw some nice gross margin performance there at 79%. I think the trepidation the market has today, we're going to see investments in this business on the front half of the year, and that's going to impact that cash flow again on the front half of the year. Look more toward the back half to see that coiled spring a little bit, but all in all, they keep on doing what they say they're going to do and I personally remain a very happy shareholder.

Chris Hill: Demand for vaccines and at-home COVID tests helped boost fourth-quarter profits for CVS, but guidance for 2022 kept shares of CVS for moving higher this week. Ron, is the expectation that moving out of the pandemic phase is bad for their business?

Ron Gross: Perhaps investors shouldn't have been surprised that management expects a 70% to 80% drop in the number of COVID vaccines it will administer this year -- that seems like investors should have expected that -- and a 40% to 50% fall in COVID testing. Maybe the severity of that drop is a little bit surprising, so they did have to cut the bottom end of their cash flow forecast for the year, which again, investors don't like when guidance, even partial guidance, gets cut, and that's what the stock reacted to this week. But demand was so strong for the quarter: 20 million vaccines, which was up from around 11 million in the preceding quarter; 8 million COVID tests; total revenue up 10%. Across their other business segments, healthcare benefits increased 8%. Pharmacy services revenue also up 8%. Management said 2022 is going to be driven by health insurance and pharmacy benefit in the absence of COVID, but that doesn't assume the potential for a fourth booster, so that will be the wildcard there. They're continuing to execute on their omnichannel health strategy, rejiggering the look of some of the stores, closing some of the other underperforming stores. We'll look forward to watching that unfold during the year.

Chris Hill: Like all restaurants, Chipotle is dealing with higher costs in food and labor. Unlike most restaurants, however, Chipotle is raising menu prices without, apparently, upsetting customers. Jason if their forth quarter is any indication of their pricing power, Chipotle might be in a class by itself.

Jason Maser: [laughter] Well, I'm glad Ron brought up Warren Buffett, because that really was how I wanted to lead this off with Chipotle, because inflationary times can make investing a bit more challenging. Like Buffett always says, brands and companies peddling products that will always be in demand are great places to look in times of inflation. I think Chipotle clearly fits this bill. Management certainly believes they do have some pricing power to cope with stretches like this. The number seemed to bear that out. Total revenue for the quarter up 22% to $2 billion, comps up 15.2%. I really found it interesting, the digital sales growth of 3.8%. That doesn't really sound like a lot, particularly when you compare it to previous quarters, but I think that just is a good sign people are getting back out at it, that people are going to restaurants, and shopping, and doing things. That's a good sign generally from a greater economic perspective. We saw a good boost in operating margin there, I think 80 basis points, their restaurant level operating margin up 70 basis points. They did take some price increases here through the year. They're going to be very thoughtful regarding that going forward, but again, looking at the market opportunity, just under 3,000 restaurants today, they recently upped that guidance. They feel there's a market out there for 7,000 total restaurants now in North America, and that includes a lot of these smaller footprint restaurants, Chipotle in-restaurants, and whatnot, looking more toward small town USA opportunities, which I think is great. All things considered, it feels like there's still plenty of room to run for the king -- I would consider the king -- of the burrito, Chris.

Chris Hill: After a rough fiscal year, Zillow appears to have ended on a high note. Fourth-quarter revenue was higher than expected, the loss was smaller than expected, and shares rose 15% on Friday. Ron, 2021 was just terrible for Zillow from an operational standpoint. Are they turning things around?

Ron Gross: Maybe, I'm going to say. [laughs] Stock is still off 75% from its 52-week high. Late last year, announced it would exit its home-buying business after a faulty algorithm, of all things, had them buying properties at inflated prices. They're going to cut 25% of their workforce. Lots of criticism about poor management communication surrounding that announcement; class action lawsuits also as a result. The shares did get a boost from this latest earnings report. The results show that the company is unwinding that buying business faster than expected, and their other segment -- their Premier Agent Advertising segment -- did increase 13%. As part of the unwinding, Zillow sold more than 8,300 homes in the fourth quarter, so they're trying to get rid of those homes as quickly as they can. Management said the company expects to post $5 billion in revenue and 45% EBITDA margins by the end of 2025 as it seeks to build a "housing super app." That puts the stock at around 6 times projected 2025 EBITDA, which isn't bad, but there's just no indication how they're going to get to $5 billion from a base of around $2 billion right now. The CEO said, "If people don't believe it at least they're going to hear that I believe it." Well, I'm not a believer quite yet, but I'll be watching.

Chris Hill: Ron Gross, Jason Moser. Guys, we'll see you later in the show. Up next, if you've got $7 million burning a hole in your pocket, you too can buy a 30-second ad on the Super Bowl. Stay right here. This is Motley Fool Money.

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Welcome back to Motley Fool Money. I'm Chris Hill. On Sunday, the LA Rams play the Cincinnati Bengals in Super Bowl 56. For companies looking to promote their products and services, 30 seconds of ad time is going for as much as $7 million. Here to discuss that and more is Bill Shea, sports business writer from The Athletic, and he joins me now. Bill, thanks for being here.

Bill Shea: Hey, thanks for having me.

Chris Hill: Let me start with what for me is the obvious question: Is it worth it?

Bill Shea: [laughs] That's a great question. On Monday morning, there will be a lot of CEOs and CMOs asking that very question. It really depends on what a brand or company or organization is trying to do. But if you want to get your name in front of as many people as possible, the Super Bowl is still the way to do that because you get about 100 million sets of eyeballs for that three or four hours on Sunday, and you get a lot of casual viewers, people who don't particularly care about the Bengals or the Rams or football in general. The TV commercials during the big game, as they say, become a cultural phenomenon, so you get all sorts of folks watching. Brands know that if they want to move widgets or just get their name out there, this is one way -- albeit an expensive way -- to do it.

Chris Hill: It seems like it's probably a little bit easier for the people who are just looking to get their brand out there. Speaking of which, Budweiser is back this year after taking a year off, and some of the usual suspects -- Pepsi, Doritos, people are going to see those. I think people are used to seeing them year after year. Is it easier for brand advertisers as opposed to a business that is trying to drive some sort of action like go to a website or something like that?

Bill Shea: Again, it comes back to what you're trying to accomplish. In the age of social media and Google and Yahoo, you can track those metrics far easier than 40 years ago with the famous Apple 1984 commercial. It turned out Apple's next quarterly earnings report like, oh, yeah, they sold a lot more computers or whatever it was back then. But companies like Budweiser and Pepsi, these are NFL sponsors already. They already have long relationships. If you do a clever ad and you're a young small company trying to get your name out there, this is definitely one way to do it. Those are usually one shot. They don't come back. You see the occasional tourism ad for some oddball place or something. Yeah, it's a calculated risk that you take that you're going to get the brand recognition. Some of it is just for, hey, when it comes time to buy a new car, change insurance, whatever it might be, they just want their name in the mix like, "Oh, yeah, I heard of so and so in the Super Bowl". Just to think about it, that's enough for some of these brands. For some of them, it's moving widgets. Sometimes it works, and sometimes it doesn't and there's a new chief marketing officer the next year.

Chris Hill: About 40% of the advertisers this year are going to be new to the Super Bowl. My first question is: Where does that number rank? That seems like a high percentage. Or is that the norm that every year somewhere in the neighborhood of maybe a third to 40% are going to be new?

Bill Shea: From what I can tell, that's not an unusually high number. I don't think anybody is real shocked by that. Especially this year you've got the crypto space, you've got the sports gambling space. There is room for turnover. For a lot of companies, it's a one-off, especially smaller non-mega-multinationals. It's a one-shot. You're going to spend that however many millions of dollars and that's it. You've blown your wad, so to speak, on the Super Bowl commercially, and hope for the best. So it doesn't strike me as a really unusual number, particularly during the last two years of pandemic that has been rough on all of American life, including some of corporate America, obviously. Some choose not to come back just because it's a bad look or it's bad for the bottom line. So I'm not really surprised by that.

Chris Hill: You mentioned earlier that on Monday, there are going to be some CEOs and chief marketing officers and probably some chief financial officers who are going to all be asking the same question: Was this worth it? Is the risk of that higher for these newer advertisers, because it seems like it would be higher for them as opposed to a business like Pepsi, which is sponsoring the halftime show and has been a steady advertiser for years?

Bill Shea: Yeah, the bigger advertisers, I mean, sometimes they deliver a clunker of an ad, but these are multibillion-dollar companies, and they have their marketing budgets to burn through, so it's not a real big risk for them unless the spot is so incredibly insensitive or a stupid thing. But how many corporations get canceled? For the other companies, yeah, it is definitely a risk, and they are going to look at all of the tracking metrics to see: Was this effective? It isn't always just on the money following the Super Bowl, barring something terrible having gone wrong. But what does the next quarterly earnings [report] look like? Did you move the widgets? Is there an uptake in EBITDA or revenue? Things like that, and it's brand by brand, what their success metrics look like internally.

Chris Hill: You mentioned Apple's iconic 1984 commercial. In the last, let's call it 10 years or so, is there maybe not an equivalent to that, but in the last decade, has there been an ad that has held up as maybe the gold standard, the aspirational when companies are thinking about, look, we're going to write this big check, not only to buy the time, but to make the commercial, because some of these ads involve celebrities, [laughs] in some cases it costs as much, if not more to make the ad as it does to run the ad. Over the past 10 years, has there been something that's been like, "Yeah, this is what we're shooting for, this is the success that we're trying to achieve"?

Bill Shea: It's hard to be what they call "sticky" with these things, especially in the Super Bowl. We're looking at potentially 70 plus ads. We tend to sometimes remember the duds. It's just a little outside of a decade now, but 2011, there was a Super Bowl ad for Volkswagen with a little boy pretending to be Darth Vader and using the Force on the car. A lot of people still talk about that. That's viewed as a successful ad. There was one, and you have to forgive me, I can't remember which company it was, but it basically was I think an insurance commercial and it involved a dead child, and that did not hit any of the right notes with anybody, and was a bit of a dud. But a lot of the bigger brands, the Super Bowl commercials are extensions of ongoing campaigns, your Spuds MacKenzies and things back in the day. But that 1984 Apple commercial, the 1984 George Orwell, that is still held up as the gold standard. That's really what set us on the path to what we see today as the Super Bowl being an advertising showcase for casual consumers and not just NFL fans.

Chris Hill: In terms of entertainment over the past 10 years, one of the big story lines has been the rise of streaming services. Netflix most obviously, but also Amazon Prime, which has pushed its way into the NFL with getting the rights to Thursday Night Football. When you think about the possibility of Amazon investing more in that space, the possibility of Apple with its streaming service, does the presence of streaming services almost guarantee that ad rates for the Super Bowl are going to continue to rise? Because just in the past year, we've seen the price go from about $5.5 million to on average around $6.5 million. Do the streaming services make that inevitable?

Bill Shea: I think they definitely play a role because we're in the heart of the streaming wars right now. None of those services are profitable to their parent companies. Everybody is looking to scale up subscriptions and usage. Yes, commercials are part of the way to get it out there and we're going to see some of that on Sunday. But I think it's the wider landscape with the broadcast industry. We've lost more than 30 million U.S. cable households. We were over 100 million seven or eight years ago, and now we're sitting around 70 million or fewer. So everybody is looking for ways to get eyeballs to monetize them. But there's also a reckoning in that we have a new normal. Even though there are more people in America and the world, not as many people are watching in prime time.

We're not going to see TV shows getting 40 million viewers, 30 million viewers regularly like we may have when we had three networks back in the day when I was a little boy in the '70s. There's been a repositioning of expectations. But Super Bowl is holding steady, it did drop in audience a little bit last year. I think that was part of the wider 2020 into 2021 decline in people watching TV related to the pandemic. Over the past year, we've seen a rebound across almost all live sports. Many people have returned to watching, returned going to games, which I think helped. I think the Super Bowl will recover in audience in that alone just because it's the biggest thing. The top 30 programs for all-time audience in American history, all but two were the Super Bowl. These networks are going to be able to name their price for some time to come. I was surprised they hit $7 million this year. That surprised me a little bit, and that may become a the average of the next couple of years, and some of these companies are certainly going to be willing to write that check.

Chris Hill: The last thing and then I'll let you go. Are there one or two ads on your radar that should be on people's radar, either for the fact that someone is taking a risk reportedly with what they are trying to do or just there's a lot of buzz that it could be the next, maybe not Apple in 1984, but maybe it's the next Volkswagen with the little kid being Darth Vader?

Bill Shea: I've seen a lot of chatter about Planet Fitness and Lindsay Lohan rebound for her after all of the tribulations she's been through. Some of these ads are already out there. It's been a trend for a while that they are released on YouTube and social days or weeks or even months before the Super Bowl. There have been some brands hold back; there will be some surprises on Sunday. There's been a rebound in auto companies coming back this year, they tend to do really interesting work, I just saw GM using Dr. Evil and the cast of the Austin Powers movies. That'll be a fun one because I'm in Detroit, so that's near and dear to me. But I'm just interested to see the surprise commercials, the shockers that I didn't know about. The other stuff I've seen, I'm like, "OK, that's interesting," but I want to be wowed unexpectedly on Sunday.

Chris Hill: For my money, The Athletic is a must for sports fans and reading Bill Shea is just one more reason to subscribe. Bill, thanks for being here.

Bill Shea: Thanks for having me.

Chris Hill: Coming up after the break, we've got details on a virtual investing conference we're hosting next week that you will not want to miss. Plus Jason Moser and Ron Gross return with a couple of stocks on their radar. Stay right here. You're listening to Motley Fool Money.

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As always, people on the program may have interest in the stocks they talk about and the Motley Fool may have formal recommendations for or against, so don't buy yourselves stocks based solely on what your hear. Welcome back to Motley Fool Money. Chris Hill here with Ron Gross and Jason Moser once again. A couple of things before we get to radar stocks. On Feb. 18, we're having a members-only event online called the Investing Essentials Summit. This is an all-day event focused on helping investors like you master your investing mindset, make sense of the current market, and pave the path to a $1 million portfolio. We also have an exclusive interview with the CEO of one of our most celebrated companies. So if you are interested, head on over to 2022.fool.com to get 60% off a subscription to our Stock Advisor service, just in time to access this event. Again, it's for our members, but you can join us. You can become one of our members by going into 2022.fool.com. I will put that URL in the show notes. I would also like to welcome the newest affiliate to the Motley Fool Money family of radio stations, WPMO in Pascagoula, Mississippi. It's our first station in Mississippi. Ron.

Ron Gross: Congrats. Good to have you.

Chris Hill: A quick update for the dozens of listeners who were tuning in last week, wondering about Emily Flippen. She did finally get her spicy chicken sandwich as part of that DoorDash promotion with Shake Shack, the whole eatcute.com thing. I checked in with Emily, she got her sandwich. Speaking of food, Jason, real quick, before we get to radar stocks, food is such a big part of Super Bowl Sunday. Do you have a tip or recommendation for the dozens of listeners who are maybe thinking about their menu, their spread for Super Bowl Sunday?

Jason Moser: Well, I'm going to kick it up a notch this year, Chris, because, I got that Traeger for Christmas. I've just really been enjoying figuring out how to use it in all the different things I can do with it. I'm going to smoke some wings this Super Bowl Sunday. Got to smoke them slowly over some hickory there. But then what I'm going to do, Chris, after they're done smoking, I told these listeners here already, they know about Big Daddy's Boy Howdy Mustard Sauce. I'm going to toss them in that mustard sauce. We're going to have Big Daddy's Boy Howdy Smoked Mustard Sauce wings. I can't give away the recipe, Chris, I can't give away the sauce recipe, but just trust me. I can already tell you, it's going to be next level.

Chris Hill: But it sounds like hickory is a nice tip for people who are looking to do some smoking some meat.

Jason Moser: Hickory is a very good tip, and I'd tell you that's the other great thing about Traeger is they have so many different types of wood pellets, you can really experiment with all of those different flavors. That's one of the things that makes it so much fun.

Chris Hill: Ron, what about you?

Ron Gross: I've got two things I'm going to do. I'm going to do a mini hamburger slider with the kicker being a spicy Calabrian pepper relish, and I will give a little kick there. I think it'll be nice. For the main course, I'm going with a spatchcock chicken with garlic and herbs. Spatchcock is butterflying a chicken, removing the backbone so it lies flat on the cooking surface and the chicken cooks evenly.

Jason Moser: I feel so proud of you right now, Ron. I feel like my mentioning of spatchcocking a chicken before has led you to this superior decision-making.

Chris Hill: [laughs] It's gonna be great. It sounds like one of those moves that really plays well with the judges, like when you're plating, on Iron Chef or something like that -- as long as you execute that, then it's just, how good is the flavor?

Ron Gross: Sure.

Chris Hill: It's going to be amazing, don't you worry. But let's get to the stocks on our radar. Our man behind the glass, Dan Boyd is going to hit you with a question. Jason Moser, you're up first. What are you looking at this week?

Jason Moser: Sure. Well, we're going to be watching The Trade Desk, ticker TTD. They've got earnings coming out on Wednesday, Feb. 16, before the open. Really just looking forward to a status update with the company. The connected TV continues to gain share, becomes a more important part of their business. International continues to grow at a breakneck pace, growing faster than domestic, and that's expected to continue, which I think is really important considering what they do. You hear a lot of talk of this Unified ID or UID2, as they refer to it. This continues to gain traction as more and more parties move away from dependence on those third-party cookies. Looking for revenue of at least $388 million and adjusted EBITDA of at least $175 million. What do I like most about The Trade Desk in this market though, Chris? We don't have to talk about the path to profitability because they're already profitable, Chris, and on top of that, they're cash flow positive.

Jason Moser: Dan, question about The Trade Desk.

Dan Boyd: Yes, Jason, The Trade Desk is, of course, an ad-buying platform. Are they going to be running a Super Bowl ad this year?

Jason Moser: I would have to believe that they have their fingers in that in some way, shape, or form. I'll be interested to hear.

Chris Hill: Ron Gross, what are you looking at this week?

Ron Gross: I've got Brookfield Renewable Corporation, BEPC, global leader in renewable energy, one of the world's largest producers of hydroelectric power, which makes up more than 62% of its portfolio. They also have growing wind, solar, and distributed generation, such as rooftop solar, their expertise in energy storage. They see continued growth ahead up to 20% annually through 2025. Should enable them to continue to generate strong cash flow, hike their dividend by 5% to 9% per year. Current yield is a solid 3.8%. For those dividend investors looking out there for a quality company that is really chasing the trend of the de-carbonization of the world and the economy, take a look at Brookfield Renewable.

Chris Hill: Dan, question about Brookfield Renewable Corp.?

Dan Boyd: I'm a little surprised at Ron's choice here, Chris, I'm not going to lie. This doesn't seem like a very "old economy" company, if I'm going to be honest.

Chris Hill: Were you maybe hoping for, I don't know, a tire company? [laughs].

Dan Boyd: Yeah, or Vulcan Materials, or some sort of railroad -- general Ron Gross stocks.

Ron Gross: Well, Dan, at our upcoming member event that Chris just talked about, we're talking about trends and I had the opportunity to talk about renewable energy and the de-carbonization of the world as being a major trend that probably will have about a $150 trillion thrown at it over time. This is one way you can play that trend.

Chris Hill: Dan, this is reminding me of the time, I think it was a couple of years ago, when we were doing radar stocks, and Ron came out, I think it was with CRISPR. We all, I think, fell off our chairs because we couldn't believe Ron was talking about cutting-edge technology in the medical space like that. Do you have a stock you want to add to your watch list?

Dan Boyd: Before I add the stock to the watch list, Chris, I just want to say Ron has held with CRISPR and gene-modification technologies since then. It's one of his favorite baskets of stocks. I'm actually going to go with him this week, gonna go with Brookfield, because -- trends. Let's get on them early if we can.

Chris Hill: Nice. Ron Gross, Jason Moser, guys. Thanks for being here.

Ron Gross: Thanks, Chris.

Chris Hill: That's going to do it for this week's Motley Fool Money radio show. The show is mixed by Dan Boyd. I'm Chris Hill. Thanks for listening. We'll see you next time.