3 Royal Wedding Stocks Worth a Look

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InvestorPlace
I fail to grasp the global media’s obsession with the “Royal Wedding” planned for Friday. But all that global media attention means money will be made — and that investors have a chance to profit from it. It looks to me as though a substantial Royal Wedding Industrial Complex (RWIC) has emerged in the last several weeks. The Gazette estimates that the RWIC — consisting of related airlines, hotels, restaurants, and retailing — is worth $1 billion to $1.5 billion in revenue  – fueled by a 120% increase in the number of tourists visiting London. Although the wedding will require an additional $30 million in security, the U.K. economy will probably make a profit — although it will be tiny when related to its $2.2 trillion economy.  Here are three publicly traded companies that are trying to get a piece of the RWIC action: General Mills (NYSE: 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 (NASDAQ: PZZA ) is selling a pizza in the U.K. that portrays the bride’s and groom’s faces; and Discovery Communications (NASDAQ: 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 royal wedding, 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-to-earnings-to-growth (PEG) ratio (that compares a stock’s P/E ratio 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 — 0.9 . 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 a share 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 a share 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 a share in 2012 . It’s worth noting that General Mills is the subject of speculation that Nestle 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 the best way to tap the RWIC that will go into hibernation Saturday — probably not to revive for another 30 years. Peter Cohan has no financial interest in the securities mentioned.