Sunday night's Super Bowl was chock-full-of-drama. And, of course, product placements. During the epic drama of Ravens, 49ers, and Beyonce, some familiar companies graced the commercial breaks, along with some relative newcomers. But shelling out money for the ad doesn't necessarily mean you're going to achieve overnight success. This year, a newcomer tried to snatch some glory, and two stalwarts fought for the top.
The Newcomer: SodaStream
After its original ad got banned by CBS, instant fizz-maker SodaStream (NASDAQ:SODA) sent a slightly older commercial for the Super Bowl telecast. But, thanks to the Internet, all was not lost. The at-home soda-maker decided to place the ad -- which lampooned both Pepsi and Coke -- on YouTube, effectively giving the company two ads for the price of one.
From a stock perspective, SodaStream seems equally savvy. While its revenue has taken a 91% jump within the past two years, its operating margin has risen impressively, from 10% to 18%. This means that, as the company has taken in more money, it has found ways to make its operations more efficient, and thus save money as a result. Sodastream's net profit margin has also gone up, from 6% in 2010, to 9% in 2012, and its P/E of 23.4 is only slightly higher than the industry average of 22.2 . Everything is looking fizzy for the promising company, and having an ad (even if it's banned) as part of the Super Bowl will only boost its publicity further.
Battling Food Titans
Two of the most high-profile companies featured in this year's game were also some of the most delicious, and both fought fiercely to grab a larger chunk of audience attention.
The first was Pepsi Co. (NASDAQ:PEP), which reprised its popular "Pick Your Own Ad" campaign for Doritos, and also featured a little-known entertainer named Beyonce as the spokesperson for its latest Pepsi campaign. Beyonce, who can't catch a break after lip-synching at the Inauguration, and who some people actually believe might have caused a blackout after her halftime performance.
The second company might sound less familiar, but was still a Super Bowl heavy hitter: Mondelez (NASDAQ:MDLZ) is the name behind Nabisco, which is the name behind the Oreo. The little cookie caused a stir with a "whisper fight" commercial that featured fire and whispering policemen. Another unexpected big moment for Oreo came after the blackout, when its ad wizards scrambled together an ad and posted it to Twitter, saying "You can still dunk in the dark." Oreo may have shown last-minute advertising savvy, but Pepsi ... Pepsi had Beyonce. Which company makes a better splash as an investment?
The answer could be a close call. In 2009, Mondelez brought in $49 billion, compared to Pepsi's $49 billion, but the soda giant eclipsed the food company's earnings in 2010 and 2011 . Margin-wise, Pepsi's operating income has slipped since 2010, from 18%, to 14%, with its net income totaling up to 9% . Mondelez, meanwhile, has a 6% net income margin, and a 12% operating profit. Amazingly enough, these companies also appear undervalued when compared to their industries' average PE. Pepsi rings in at 19.48, compared to the beverage industry's 24.41, and Mondelez is 14.95, compared to the "Confectioners'" industry standard of 24.71.
So Who's the Winner?
In truth, both of these companies might be winners for a portfolio, and their prevalence during Sunday night's game proves that they can shell out the money for a huge ad and profit off of it, instead of hemorrhaging money like a tragic newcomer. Still, keep an eye out for relative newcomer SodaStream. If its financials continue to sprint forward, and it continues to strategize as effectively as it did last weekend, Pepsi might soon have reason to worry.