Many businesses fail within a few years and many others fail during their first economic downturn, which is why it's rare to find a business that has stuck around since 1870. It's even rarer to find a company this old still growing at a strong pace.

On March 5, Brown-Forman (BF.B -1.84%) released fantastic third-quarter earnings and raised its full-year outlook. In the third quarter, the company grew sales by 5% and earnings per share 13% from the year-ago period. These results compare favorably with those of competitors Diageo (DEO -1.48%) and Beam (BEAM.DL).

For the six month period ended Dec. 31, 2013, Diageo grew net sales 1.8% and earnings per share by 4% from the year-ago period. Beam grew sales by 5%, but earnings per share declined 29% from the year-ago period. However, with the exclusion of certain losses from early debt payment and non-cash impairment, Beam grew EPS by 15% in the fourth quarter. 

Where Brown-Forman's growth comes from
In its third-quarter earnings release Brown-Forman raised its outlook for the year as it expects to earn between $2.95 and $3.05 per share in fiscal 2014. This would represent a growth rate of 7.3% to 10.9% over fiscal 2013. So where will the growth come from for Brown-Forman?

Brown-Forman's most well-known brand, Jack Daniels, has grown sales 10% in the first nine months of this year over the year-ago period, which includes higher gains from the newer Tennessee Honey brand. Also, the top-shelf bourbon brand Woodford Reserve has grown sales by 26% so far this year.

Coupled with the growth of individual brands, emerging-market sales for the company as a whole have grown 12% this year. Brown-Forman has also slimmed down its operations, which has widened margins and therefore increased earnings growth as well. Net profit margin for the first three quarters of this year was 17.2%, which compares to 16.3% for the first three quarters of last year.

Will the growth continue?
Brown-Forman's three biggest markets by geography are the United States, Europe, and Australia with each representing 41%, 30%, and 14% of the company's total sales, respectively.  Sales outside of the United States provide 59% of total sales, up from only a third of sales ten years ago. As you can see, 85% of the company's sales come from these three regions, and only 15% come from the entire rest of the world.

Brown-Forman's much-larger competitor, Diageo, reported $11.4 billion in revenue for fiscal 2013 while Brown-Forman posted $2.8 billion revenue for fiscal 2013. Sales in emerging markets made up 42% of Diageo's total company revenue in 2013.  Clearly this shows that there is enormous potential for Brown-Forman in those markets and the best part is that the groundwork is already laid, as the company already sells products in 150 countries. With products already on the shelves in that many countries as consumer incomes rise around the world, I expect to see the 15% of sales generated outside of the U.S., Europe, and Australia rise quite a bit in the next few years.

Bottom line
Brown-Forman has been around over 140 years, and you don't survive that long on luck. The company is uniquely positioned to continue to grow at a high rate as it capitalizes on the opportunities presented by growth in the world economy. In the event of a downturn the company protects shareholders with a profit margin over 17% and a product that sells in good times and bad; thus it can insulate investors from hard times. 

The problem is that the market recognizes this potential, and shares of the company trade at 30 times the previous twelve months' earnings and 26 times the next twelve months' earnings. Diageo trades at around 17 times trailing earnings and the industry as a whole trades at around 17 times trailing earnings as well.

At almost 30 times earnings, Brown-Forman may be a little rich for my blood right now. However you can rest assured to know that whenever you buy its shares, you will get a piece of an excellent company that you can own for many, many years to come and which you will not have to worry about. This company has persevered over the last 140 years, and there's a good chance it will persevere for the next 140 years.