The new year brings with it new challenges, new sights -- and old investment techniques. While the blogosphere is full of articles like "The 28-Bagger You Can't Miss in 2013" and "Apple -- Can It Hit $9,000?", there's still a place in the world for companies that grow at an even, consistent pace. Instead of looking at brands that might blow up this year, here are three companies that investors can feel safe with over the long haul. In 2023, these brands are still going to be chugging along, making money for themselves and for shareholders.
Getting the most out of slow growth
Let's start with my current favorite company: Buckle (BKE 0.75%). Buckle is a U.S.-based denim retailer, operating 440 stores in 43 states. The company has had a slow growing strategy, which ensures that it never overextends itself. That has led to strong, steady bottom-line growth without excessive debt being picked up. From 2008 to 2012, Buckle increased its net income by 101%, while keeping long-term debt flat -- at $0.
For the 48 weeks through the end of December, the comparable-store sales have risen slightly, up 2.4%. That's not going to blow the doors off the house, but it's growth nonetheless. In choosing Buckle, I opted to pass up my second-favorite apparel retailer, Gap (GPS +0.28%). Gap has had much better sales growth this year, with comparable sales up 4% through the end of December. That might not look like much more, but it's a huge swing from where the company was in 2011, when comparable sales were down 4%.
That swing is why I'm sticking with Buckle. Gap has made a series of poor choices in the past, sacrificing quality for speed, and moving itself too far outside of its core market for my comfort. I'm not convinced that it won't happen again, and while right now its purchase of Intermix seems positive, there are a lot of ways for Gap to screw that move up. For 2023, Buckle is my brand.
Keeping the coffee dream alive
Like Gap, Green Mountain Coffee Roasters (GMCR +0.00%) has had a pretty good turnaround this year. To be sure, there are huge barrels of doubt still sitting on the loading dock, but that's still a better position than the company was in last year. Now, Green Mountain can look forward to a new year of strong sales, new products, and new ventures -- all of which it has a track record of screwing up. When I think about the coffee world of 2023, I'm not sure I can see Green Mountain, but I know that I can make out the form of Starbucks (SBUX 1.03%).
After a slow few years, Starbucks spent 2012 buying companies like most of us buy lattes. With the addition of a bakery and a tea retailer, a tie-in with a payment provider, and a new one-cup brewer, Starbucks has rounded itself out nicely. That led to a 7% increase in U.S. comparable sales last year, along with a 10% increase in earnings per share. More than just rounding itself out, Starbucks has given itself lots of opportunities for growth, which were summarized in early December -- included in the plan, 3,000 new U.S. stores by 2017.
That kind of growth isn't going to be easy, but Starbucks has the management team and resources to make it a reality. Again, looking ahead 10 years, Starbucks is a clear winner.
A competitive edge
To finish things off, I wanted to make sure I found a third company that's a household name, makes something we all use, and has an international footprint. In short, I wanted to find Nike (NKE 0.28%). Last quarter, Nike increased earnings per share by 11%, with revenue climbing 7%. Last year, it also made the wise decision to divest itself of the Umbro brand, which is primarily geared toward soccer players. While Nike hasn't always had a strong soccer offering, that has changed in recent years. Now Nike has a huge soccer offering, and has been the official ball provider for the Barclays Premier League since 2001.
In 10 years, Nike is going to have made even more headway in the Asian market. While many companies see Asia as the next big thing, Nike is one of the few that has the brand recognition and demand to actually make a move. I can't imagine anyone regretting having Nike in their 2023 portfolio.
