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Let’s look at their respective revenue in 2012, compiled and tabulated into the following chart.
The smallest of them all is Alcoa (Aluminum Company of America) with revenue of slightly more than 20 billion dollars a year. The largest of them all, is none other than the retail titan Wal-Mart, with revenue exceeding 450 billion dollars!
In terms of market value, the breakdown of the earlier mentioned combined total of 4.3 trillion dollars is tabulated in the following chart.
Of course, these companies are highly valued by investors and they are typically a must have in one’s portfolio. They made good profits and paid dividends consistently, year in and year out.
GREAT IN THE INSIDE AND THE OUTSIDE
The harder we analyze the Dow30 companies, the more we combed through their records, the more prominent ‘an often overlooked fact’, stood out. These very large so-called American companies are becoming less and less “American”, and becoming more and more “International” or “Global”. Just how much are these companies earn from overseas? We tabulated the data for you, and the numbers are very surprising.
One interesting member of the Dow30 is Coca-Cola. This hundred year old company is truly an American brand and is one of the most recognized. Yet, is it only an American company, or is it a fully international company?
Coke is only 41% “American”. The majority of Coke’s revenue is derived from overseas. Coke took in 19.7 billion dollars in America, but it is dwarfed with the revenue obtained from its overseas customers at 28.3 billion dollars. Therefore Coke is no longer an “American” company as everyone tends to believe. Coke has grown into a truly multinational company, deriving its revenue mostly from the non-US market.
This fact has a big implication to the performance of Coke in general. For example, Coca-Cola Co. may still perform well even if its local US sales are not performing as expected, should its overseas sales continue to grow. A decline in the United States GDP may not impact Coke that much, because only 41% of its sales would be affected. This extraordinarily important fact is commonly ignored, or simply overlooked by many commentators and journalists out there, but it is one fact that can lead to wrong conclusions regarding the state of the US economy or that of Coke itself.
Excerpts and Highlights from Coca-Cola Co. 2011 and 2012 Annual Report:
Coca-Cola is one great beverage company and is the best in its sector. As it turns out, Mexican drinks more of Coca-Cola than Americans do according to Coke’s report.
[Disclaimer: Though we do not endorse the over drinking of sugary drinks and do not own any Coca Cola stocks, the fact remains that their drinks are valued by other consumers around the world. It is also great that Coca Cola brands also included other beverages such as juices, tea, water, sports and energy drinks].
Another interesting Dow30 company is McDonald’s Corp.
Amazingly, the ubiquitous burger chain is only earning one-third of its revenue from America; the majority of its revenue is from overseas. McDonald’s is a great company and is an icon of America worldwide, yet it is no longer an “American” company. It is a global multinational corporation, but headquartered in America. We do not have the investor (owner) breakdown of McDonald’s Corp., but perhaps it is still mostly owned by Americans. If this is the case, then American investors are making good money from their investments by venturing overseas. American investors would get an instant global exposure of their share ownership, without having to buy a multitude of food companies internationally.
This burger chain has very large franchise base, operating thousands of McDonald’s restaurants in America as well as worldwide. Their sales are bigger than McDonald’s Corp itself.
Similar to the corporate McDonald’s itself, the high percentage of sales derived from overseas is just as big for the franchises. This is to be expected. Indeed the burger chain is the real “King” in selling burgers worldwide (and especially so worldwide!).
[Note: As we have mentioned in our book, “You Don’t Represent Us – Answering Occupy Wall Street”, the current capitalism system is actually very fair and opportunity to become rich is abundantly available. Fred Turner was a person hired to flip burgers at the first McDonald’s burger shop and ultimately became its CEO. This opportunity will not be available if “fair and equal” distribution of money and asset as per the occupiers demand is entertained. Fair is not the same as equal and both cannot be in the same sentence.]
The growth rate of McDonald’s franchises sales overseas is more than 10% a year since 2002, while that of within America is only growing at 2.6% a year. By 2009, for the first time, more sales is derived from overseas than in America itself and is has not looked back ever since.