How often do you see a corporation's logo proudly emblazoned on a bumper sticker? Or a worldwide outpouring of emotion over a CEO's death? Or people lined up by the hundreds, practically begging a company to relieve them of their hard-earned cash for the latest and greatest product?
I'm talking, of course, about Apple. Companies who inspire this kind of fierce dedication are apt to perform well for investors in both good times and bad. Following are three corporations that inspire loyalty in the Apple tradition, along with a look at how each is currently doing:
I haven't seen any Chipotle bumper stickers yet, but that doesn't mean they're not out there somewhere. This fast-casual Mexican restaurant is taking its niche by storm, and the folks who like it like it a lot. My local Chipotle always seems to be busy, and if you like Mexican food, it's easy to see why.
Chipotle stresses fresh, healthy food -- all made to order right in front of you -- in a hip and friendly atmosphere. And while their prices aren't exactly low, the portion sizes are generous. Everything about Chipotle keeps people coming back for more. By the numbers:
- Quarterly revenue grew a big 23.7% year over year. Compare this with Taco Bell operator and all-around muscular rival Yum! Brands
, which only grew its revenue at 15.4% YOY -- actually a very good number, but not Chipotle good. (NYSE: YUM)
- Chipotle's quarterly earnings also grew a hefty 23.7% YOY, but at 29.9% YOY, Yum! is no slacker. Somewhere between the top and bottom line of the income statement, Yum! is doing a better job at controlling costs than Chipotle. Being a much bigger company, Yum! may benefit from better economies of scale.
- Chipotle has a little more than $456 million in cash and only $3.66 million in debt, giving the company a very healthy cash-to-debt ratio. Yum! is reversed on this metric, with $1.21 billion in cash and $3.32 billion in debt. With interest rates as low as they are, at least money is cheap right now.
Chipotle's stock is trading for a pricey $410 per share, and at 60 the P/E is pretty high, too. People are as crazy about the stock as the food, but you're getting a lot of company for the multiple. Chipotle really commands its niche, and it's growing its operations in an intelligent, thoughtful manner.
My wife was crazy about Costco before it was cool to be crazy about Costco, and I was first in line to make fun of her for going to a place that sold food in restaurant quantities. But it wasn't long before even a Luddite like me could see the benefits -- primarily the cost savings -- of buying in bulk.
And the more I learned about the company itself, the more I liked it. Costco pays its employees well, and as a result they're happy and take their jobs seriously. And the company feels it has a real duty to play a positive role in whatever community it sets up shop in. All of this adds up to a formula that, like Chipotle, keeps customers coming back for more. By the numbers:
- Quarterly revenue grew a healthy 10% YOY, while peer Wal-Mart
managed only 5.9%. (NYSE: WMT)
- Costco's quarterly earnings grew by 13.2% YOY, while Wal-Mart was actually down 14.7% YOY.
- Costco has $5.78 billion in cash and $2.28 billion in debt. Wal-Mart is in direr straits on this metric, with only $6.55 billion in cash on hand versus $53.4 billion in debt. But again, money is cheap right now.
Costco's stock is trading for around $90 per share with a P/E of 26. This P/E is also on the high side, but that's what happens with companies people are crazy about -- and also why these types of companies perform well in good times and bad.
3. lululemon athletica
Lululemon is a yoga-gear retailer for the coolest of the cool and the hippest of the hip. A Motley Fool colleague of mine, who fits perfectly into the aforementioned category, is crazy about the brand and says it caught her eye as an investment because she suddenly started noticing more and more people in her yoga class showing up wearing the company's clothing.
Apparently it's also really good gear, with a patented material that works to wick moisture away and leave you looking, if not necessarily refreshed and pretty, at least not drenched in sweat at the end of a yoga session. By the numbers:
- Quarterly revenue at Lululemon grew a giant 31% YOY.
- Quarterly earnings were up a whopping 50.9% YOY.
- Cash on hand is a hardy $277 million with no debt.
The stock is trading for around $72 per share with a P/E of 63. Again, high P/Es like this are what you get with companies that people feel emotionally connected to.
Standing on the shoulders of Apple
Chipotle, Costco, and Lululemon. Three companies that, in their own ways, inspire brand loyalty in the tradition of Apple and, like Apple, are investments that will perform well in good times and bad. Read about another such investment The Motley Fool is bullishly calling its top stock pick for 2012 in this special free report, aptly titled "The Motley Fool's Top Stock for 2012." Get your copy while the stock is still hot by clicking here now.
Fool contributor John Grgurich would love to look refreshed and pretty after a yoga workout, but he owns no shares of any of the companies mentioned in this column. Follow John's dispatches from the tumultuous front lines of capitalism on Twitter@TMFGrgurich. The Motley Fool owns shares of lululemon athletica, Apple, Wal-Mart, and Chipotle. Motley Fool newsletter services have recommended buying shares of Chipotle, lululemon athletica, Wal-Mart, and Apple, as well as creating a bull call spread position in Apple, a bear put spread position in Chipotle, and a diagonal call position in Wal-Mart. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a scintillating disclosure policy.