5 All-American Companies That Aren’t

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#5 Independence

Ahh, Amurrrrica. The land of the free, of stars and stripes, of diversity and opportunity, innovation and so much more.

Countless companies seem to embody the American ideal in both their entrepreneurial spirit and in the products they create — many of which have become symbols and staples of U.S. culture.

But some of such companies, though they may seem as classically all-American as the quarterback-cheerleader high school sweethearts with a house, dog and yard full of kids, aren’t as homegrown as they may seem.

Many brands with a small-town start have long fled the homeland and now have a big-time global footprint. Let’s take a look at five big-name all-American companies for which a majority of revenue ain’t from America after all:

General Electric

General Electric GEYear-to-date gains: 19%
Revenue overseas: 53%

Flip through just about any American history textbook and you’ll find Thomas Edison’s name. The genius didn’t just invent the light bulb, he also started Edison General Electric — the business that, after a merger, became the General Electric (NYSE:GE) we know today.

The company has since grown into a blue-chip with a global footprint, now serving customers in more than 100 countries. Less than half of GE’s $147.3 billion in revenues last year came from the U.S.

Plus, global markets have been where the growth is, with GE scoring gains of 29% in Latin America, 28% in China and 46% in Australia. Overall, it expects seven of nine growth regions to have double-digit order increases in 2012.

Weak demand in Europe has been weighing on GE’s shoulders, though, and played a role in worse-than-expected sales during the most recent quarter. Looking ahead to 2013, that tough reality doesn’t seem to be going away. As CEO Jeff Immelt put it: “Europe is going to be a grind. We are not assuming that Europe gets any better.”

Coca-Cola

Year-to-date gains: 7%
Revenue overseas: 54%

From the classic red can to folks ordering “Coke” when they just want a soda, it’s clear that Coca-Cola’s (NYSE:KO) namesake product has become an American staple in the century-plus it’s been around. The Atlanta-based company — a member of InvestorPlace‘s Real America Index — has grown far beyond its Georgia hometown and the classic cola.

Now, the consumer giant has more than 500 products and conducts business in more than 200 countries. In fact, it got only about 46% of its revenue from North America in the most recent quarter. Coca-Cola’s international business, on the other hand, raked in 37% of total sales, while revenue from its Bottling Investment Groups — which houses non-North American Bottling companies — was responsible for another 17%.

In Q3, domestic sales gained just 2%, while international revenue grew 5%. Still, the global slowdown hurt Coca-Cola. A strong U.S. dollar and the sale of more low-priced drinks in the trouble regions of Europe and Asia led to a mere 4% gain in profits.

But international markets are still the focus for the future. Coca-Cola is investing $5 billion in India from 2012 to 2010 — where the company enjoyed 15% volume growth overall and 34% volume growth for sparkling beverages in the last quarter alone.

Nike

Year-to-date gains: 2%
Revenues overseas: 60%

Just as sports are a huge part of America, Nike (NYSE:NKE) is a huge part of sports. The iconic company was founded in 1964 by two diehard runners from the University of Oregon — hence the fact that Nike represents Oregon in InvestorPlace’s Real America Index — and the brand has since become an American standout, representing legends like Michael Jordan and Tiger Woods.

But even though Nike feels American through and through, its balance sheet tells quite a different story. In the most recent quarter, the company sold $6.67 billion worth of apparel, sporting equipment, shoes and other athletic gear around the world — and only $2.7 billion, or 40%, of that was sold in North America.

Nike gear can be snatched up in more than 160 countries across the globe, and the company gets nearly 20% and 10% of its revenue from Europe and China, respectively. However, in the first quarter, macro problems led to a 5% year-over-year drop in European revenue, while the 8% jump in slowing China was barely one-third of the sales growth Nike enjoyed in North America.

Heinz

Heinz logoYear-to-date gains: 8%
Revenues overseas: 60%

H.J. Heinz (NYSE:HNZ) isn’t just all American for its blue-collar Pennsylvania roots, but also for its go-to ketchup, which simply has no match. Odds are you’ll find it on the table at just about any American restaurant … and you’ll find people very upset when that’s not the case.

But Heinz doesn’t just control 60% of the U.S. ketchup market, it’s also a front-runner in foreign markets from Russia to Venezuela to Poland. It proudly claims that it sells “650 million bottles of Heinz ketchup every year and approximately two single-serve packets of ketchup for every man, woman and child on the planet.”

Oh, it also makes countless other products like Weight Watchers meals and Ore-Ida French fries.

Between consumer products and food services, Heinz gets nearly 60% of its revenue overseas. Europe brought in $808 million of the company’s $2.83 billion in the most recent quarter, while the Asia and Pacific Region sold $505 million worth. Emerging-market sales alone represented nearly a quarter of the company’s total and posted double-digit growth. That helped Heinz achieve its 30th straight quarter of organic sales increases.

Yum Brands

#1 YUM! Brands (YUM)Year-to-date gains: 12%
Revenue overseas: 78%

Kentucky Fried Chicken may seem as down-home American as you can get, but don’t be fooled. Parent company Yum Brands (NYSE:YUM) — also responsible for Taco Bell and Pizza Hut — may be based in Louisville, but it’s far from red, white and blue.

Just take a quick glance at Yum’s website for proof: A large photo (itself a takeoff on an iconic American image of steelworkers on a lunch break while erecting the RCA Building) captures a diverse group of people snacking on food from the company’s three restaurant chains, in front of a background that includes landmarks from across the globe.

It’s a fitting image, considering that Yum got a mere 22% of its $3.7 billion in revenues from the U.S. in the most recent strong quarter. China, where the company has nearly 5,000 locations and is rapidly adding more, was responsible for 55%. India and the international (YRI) division — including Russia, Japan, Thailand, Australia, France and more — brought in the remaining 23%.

Such a heavy exposure to China and other emerging markets can be a double-edged sword, though. Just last week, Yum shares shed around 15% on news that slowing Chinese sales were expected to weight on the company’s numbers — even in 2013.

As of this writing, Alyssa Oursler did not own a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2012/12/5-all-american-companies-that-arent/.

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