U.S. Firms Tap Foreign Growth

8/1/2011


Over the last decade, the world economy has expanded at an annualized rate of 5.9%. The U.S., in contrast, has seen gross domestic product rise at a 3.9% clip. According to the World Bank, the world economy should expand at an annual rate of about 3.5% over the next three years, versus 2.7% for the U.S. economy.

Not surprisingly, many U.S. companies look overseas for growth. The 290 S&P 500 Index components that have reported foreign-sales data since 2005 combined to deliver annualized growth of 5.3% in foreign sales over the last five years, versus 3.0% annual growth in U.S. sales.

Many U.S. companies invest heavily overseas, hoping to tap into that superior economic growth. Some, like Wal-Mart Stores ($54; WMT), spend most of their expansion dollars outside the U.S. Others, like technology concerns Altera ($42; ALTR) and Corning ($17; GLW), insurer Aflac ($45; AFL), and Newmont Mining ($58; NEM), generate most of their revenue in foreign countries, exposing them to many sectors of the global economy.

The table below lists 20 U.S. multinationals that generate at least 25% of their revenue outside the U.S. and have managed annualized foreign-revenue growth of at least 8% over the last five years.

U.S. COMPANIES WITH FOREIGN GROWTH
All 20 of the A-rated stocks below generate at least one-fourth of their revenue overseas and have managed annualized growth of at least 8% in foreign sales over the last five years. For most companies, foreign sales grew at a faster rate than U.S. sales. Stocks recommended for purchase are presented in bold.
Foreign Sales
5-Yr. Chg. (Annual.)
Company (Price; Ticker)
In
Millions
($)
12-Mo.
Chg.
(%)
5-Yr.
Chg.
(Annual.)
(%)
% of
Total
Sales
Total
Sales
(%)
EPS
(%)
Oper.
Cash
Flow
(%)
Quadrix
Overall
Score
Sector
Industry
Abbott Laboratories
($52; ABT)
19,973
22
16
57
11
12
10
90
Health Care
Pharmaceuticals
Adobe Systems
($30; ADBE)
2,134
25
14
56
12
14
10
98
Technology
Software
Aflac ($45; AFL)
15,997
10
9
76
8
8
13
91
Financials
Insurance
Alliance Data Sys.
($100; ADS)
860
10
16
31
11
18
32
96
Technology
Tech Services
Altera ($42; ALTR)
1,627
67
13
83
13
28
14
95
Technology
Semiconductors
Apache ($128; APA)
7,883
43
11
65
11
4
11
87
Energy
Oil, Gas &
Cons. Fuels
Apple ($403; AAPL)
36,592
78
45
56
41
65
76
100
Technology
Computers
& Periphs.
Applied Materials
($13; AMAT)
8,401
108
9
88
8
11
6
90
Technology
Semiconductors
BlackRock
($184; BLK)
2,788
100
64
32
45
22
50
87
Financials
Capital Markets
Corning ($17; GLW)
4,922
21
9
74
8
44
14
90
Technology
Electronic
Equipment
EMC ($27; EMC)
7,863
18
13
46
13
16
16
79
Technology
Computers
& Periphs.
Freeport-McMoRan
($56; FCX)
13,687
35
34
72
35
14
42
96
Materials
Metals & Mining
Gilead Sciences
($42; GILD)
3,725
9
29
47
26
28
33
86
Health Care
Biotechnology
Hewlett-Packard
($37; HPQ)
81,491
11
8
65
8
19
7
78
Technology
Computers
& Periphs.
MasterCard
($313; MA)
3,235
16
20
58
14
37
43
94
Technology
Tech Services
Newmont Mining
($58; NEM)
7,441
29
24
78
16
34
22
91
Materials
Metals & Mining
Oracle ($32; ORCL)
20,348
33
21
57
20
21
20
97
Technology
Software
St. Jude Medical
($48; STJ)
2,510
13
16
49
11
15
13
68
Health Care
Equipment
Visa ($89; V)
3,387
17
15
42
14
56
61
95
Technology
Tech Services
Wal-Mart Stores
($54; WMT)
109,232
12
13
26
6
9
5
83
Cons. Staples
Food & Staples
Retail
Note: Quadrix scores are percentile ranks, with 100 the best.

 


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