Should You Invest in the Royal Wedding Industrial Complex?
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.
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.
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.)