3 Stocks to Watch in Big Brands

By Markets Fool.com

Brand strength has never been more important than in today's global economy. Consumers are demanding more for their money, and those companies that can differentiate themselves from their competitors and earn the trust of their customers are often well rewarded in the marketplace.

Continue Reading Below

In fact, research company Millward Brown recently released the 10th edition of its annual BrandZ Top 100 Most Valuable Global Brands report and noted that a portfolio of top brands grew by 102.6% over the last decade, significantly outperforming the 63% return of the S&P 500 during that time. The report went on to state that strong brands "help drive sales, grow market share, and build shareholder value."

With brand power being such a large determinant of success, investors may wish to take notice of the explosive gains in brand value experienced by Facebook , Chipotle Mexican Grill , and Disney in the last year.

Source: Facebook.

Facebook, up 99%
Facebook topped the "Top Risers" list in the BrandZ report, with Millward Brown estimating that the value of its brand nearly doubled to $71 billion over the last year.

Continue Reading Below

Facebook has made tremendous progress in transitioning from a primarily desktop-based platform to a mobile juggernaut. Nearly 1.25 billion people use Facebook on mobile devices every month, and mobile advertising revenue represented approximately 73% of total ad revenue in the first quarter of 2015. With mobile advertising revenue surging 82% during the quarter, expect Facebook to continue to excel in this area.

Key acquisitions such as Instagram and WhatsApp are boosting Facebook's relevancy among young users and providing exciting new growth opportunities. And make no mistake, with an already 1.4 billion strong -- and increasingly engaged -- user base, massive monetization potential still remains on Facebook's core namesake platform, with video ads in particular showing tremendous promise.

All told, Millward Brown estimates that Facebook's brand value has increased 272% since its first appearance in the BrandZ Global Top 100 in 2011. Look for Facebook to continue to strengthen the power of its brand over the next five years and beyond.

Chipotle Mexican Grill, up 44%
Chipotle Mexican Grill topped the list for growth in the fast food section of the BrandZ report, with an estimated year-over-year brand value increase of 44% to $11 billion.

Chipotle is winning by positioning its brand as a healthier choice than the competition. Its commitment to Food With Integrity is resonating well with consumers who are increasingly demanding higher quality and more sustainably sourced foods.

Millward Brown notes that innovative brand messaging such as the satirical video series "Farmed and Dangerous" have helped to further differentiate Chipotle from the more troublesome practices of industrial agriculture -- and highlighted Chipotle's more natural sourcing methods.

Combined, these efforts are spicing up Chipotle's growth. Same-store sales exploded 16.8% higher in 2014, helping to drive sales and earnings-per-share growth of 27.8% and 35%, respectively.

With its reputation for higher-quality ingredients and more responsibly raised foods cemented, expect continued market share gains for Chipotle in the years ahead.

Source: Disney.

Disney, up 24%
Many investors may find it surprising that a business founded in 1923 would earn a place on a list of fast-growing brands. But Disney continues to defy its skeptics, and Millward Brown estimates that Disney's brand value leapt 24% to $43 billion over the past year.

Disney's treasure trove of brands continues to deliver gold to fans and investors alike. ESPN dominates the sports entertainment industry. New franchises like Frozen have helped reinvigorate Disney's namesake brand. And Marvel, Pixar, and LucasFilm all appear set to deliver a steady stream of blockbuster box office hits.

Disney excels at monetizing these brand assets through its global marketing machine. Its parks and resorts are enjoying record attendance, and its consumer products segment enjoyed a 22% jump in operating income in 2014.

In addition, Millward Brown notes that Disney is very effective at using social media to drive excitement around its films and product releases. For example, Disney's trailer of its upcoming Star Wars: The Force Awakens film has already been viewed more than 200 million times, including 88 million times in the first 24 hours after it was released.

With a collection of brands that are the envy of the entertainment industry, expect Disney's brand value -- and the value of its stock -- to march higher for years, and even decades, to come.

The article 3 Stocks to Watch in Big Brands originally appeared on Fool.com.

Joe Tenebruso has no position in any stocks mentioned. The Motley Fool recommends Chipotle Mexican Grill, Facebook, and Walt Disney. The Motley Fool owns shares of Chipotle Mexican Grill, Facebook, and Walt Disney. Try any of our Foolish newsletter services free for 30 days. 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.