What COVID-19? World's 5 most valuable brands are up 54%

The club has changed dramatically in the last 10 years, with only Microsoft and Google holding on to their spots among the world's top brands.

rising asx share price represented by covid masks hanging in front of rising red arrow

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In a world where share markets increasingly ignore traditional financial metrics to figure out the worth of companies, brand value has never been more important.

But even a quality as ethereal as brand value can be measured.

Each year, United States consultancy, Interbrand, publishes a list of the top 100 brands in the world.

Clare Capital analyst, Robin Basra, said the rankings are calculated as a combination of three attributes – financial forecasts, the role of the brand and the strength of consumer preference for the brand.

And the world has dramatically shifted to technology over the past 10 years.

"A decade ago, Coca-Cola Co (NYSE: KO), IBM (NYSE: IBM), Microsoft Corporation (NASDAQ: MSFT), Google (Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG)) and General Electric Company (NYSE: GE) represented the most valuable brands in the world," said Basra.

"In 2020, Google and Microsoft retain their positions, Apple Inc (NASDAQ: AAPL) has replaced IBM as the most valuable technology brand, and the others have fallen lower down the order – signalling changing dynamics and consumer preferences."

Another nod to the way the globe is shifting is that a non-American company, Samsung Electronics Co Ltd (KRX: 005930), snuck in at fifth place.

Valuable brands outperform rest of share market

This brand value thing matters on the stock market. 

In a year when most publicly listed companies were hammered by COVID-19, the share prices of the five most valuable brands were up 54% on average.

Even when generalised out to the 100 most valuable brands, their collective share price has outperformed the S&P 500 Index (SP: .INX) by more than double.

Top 5 brands 2010 rank Age (years) 2020 brand value (USD) Brand value multiple 2010 to 2020 Revenue multiple 2010 to 2020 Share price change in last 12 months
1. Apple Inc (NASDAQ: AAPL) 17 43 $323 billion 6.1x 7.1x 80% up
2. Amazon.com, Inc
36 26 $201 billion 8x 4.6x 78% up
3. Microsoft Corporation (NASDAQ: MSFT) 3 45 $166 billion 9.5x 10.8x 47% up
4. Alphabet Inc (NASDAQ: GOOGL) 4 22 $165 billion 6.6x 6.4x 37% up
5. Samsung Electronics Co Ltd (KRX: 005930) 19 82 $62 billion 4.7x 1.5x 27% up
Source: Clare Capital. Table created by author 

Most valuable brands by sector

The brand leaders for each sector have also shown healthy share price growth. 

The exception is Toyota Motor Corp (TYO: 7203), which perhaps isn't surprising considering the economic downturn.

Sector Most valuable brand Age (years) 2020 brand value (USD) Share price change in last 12 months
Technology 1. Apple Inc (NASDAQ: AAPL) 43 $323 billion 80% up
Beverage 6. Coca-Cola Co (NYSE: KO) 134 $57 billion 2% up
Motoring 7. Toyota Motor Corp (TYO: 7203) 87 $52 billion 4% down
Apparel 15. Nike Inc (NYSE: NKE) 56 $34 billion 41% up
Luxury 17. LVMH Moet Hennessy Louis Vuitton SE (EPA: MC) 97 $32 billion 26% up
Source: Clare Capital. Table created by author 

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Tony Yoo owns shares of Alphabet (A shares) and Amazon. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Microsoft, and Nike and recommends the following options: long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and Nike. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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