Should You Invest in the Royal Wedding Industrial Complex?

I am not sure which is worse -- the media's obsession with birthers or its wall-to-wall coverage of the so-called Royal Wedding (RW) planned for April 29. But all that global media attention means money will be made and that investors have a chance to profit from it. Here are three publicly-traded companies that are trying to sell into RW public enthusiasm.

A substantial RW Industrial Complex (RWIC) has emerged from hibernation in the last several weeks. The Gazette estimates that the RWIC -- consisting of RW-related airlines, hotels, restaurants, and retailing -- is worth $1 billion to $1.5 billion in revenues -- fueled by a 120% increase from 500,000 to 1.1 million in the number of tourists visiting London. Although the RW will require an additional $30 million in security, the UK economy will probably make a profit -- although that profit will be tiny for its $2.2 trillion economy. 

Here are three publicly-traded companies that are trying to get a piece of the RWIC action:

• General Mills (GIS) whose Betty Crocker unit is offering "recipes for versions of the bride’s and groom’s wedding cakes;" according to the New York Times.
• Papa John's International (PZZA) is selling in the UK a pizza that portrays the bride's and groom's faces; and
• Discovery Communications (DISCA) is offering 89 hours of programming with royal themes through its TLC Network.

None of these companies is likely to gain a market-moving bump in profit from the RW, so we need a different way to judge them. For that, let's look at their recent financial performance and whether their stock is reasonably priced. For that, we examine their Price/Earnings to Growth (PEG) Ratio that compares a stock's P/E to its earnings growth rate -- a PEG of 1.0 looks reasonably priced to me.

Here's my analysis of these three RWIC companies based ranked by PEG:

• Papa Johns 0.90. In the last year, the company generated $1.1 billion in revenue and $52 million in net income. It trades at a P/E of 15.3 and its earnings are expected to grow 17% to $2.44 in 2012. Its co-CEO recently departed -- that seems like a caution signal to me.
• Discovery Communications 1.37. In the last year, the company generated $3.8 billion in revenue and $630 million in net income. It trades at a P/E of 28.8 and its earnings are expected to grow 21% to $2.71 in 2012.
• General Mills 1.91. In the last year, the company generated $14.8 billion in revenue and $1.7 billion in net income. It trades at a P/E of 15.3 and its earnings are expected to grow 8% to $2.68 in 2012. It is worth noting that General Mills is the subject of speculation that Nestle (NESN) will acquire it.

While Papa Johns looks appetizing on a PEG basis, its management turnover suggests it might be wise to avoid it. And unless General Mills gets acquired, it looks pretty pricey.

Of the three, that leaves Discovery Communications as a way to tap the RWIC that goes into hibernation Saturday -- probably not to revive for another 30 years. (And if only the birthers could follow the RWIC into permanent hibernation, we'd really be making progress.)