Investing, 'Mad Men' Style

Updated
Mad Men Don Draper
AP

Besides entertaining viewers with top-notch acting, meticulously created era-appropriate settings, and amazing vintage fashions, AMC's "Mad Men" offers a full-color, multidimensional peek into the hottest businesses of the era.

Don Draper and company have hobnobbed with executives from Lucky Strike to Hilton Hotels to Dow Chemical, and pitched campaigns for everything from Clearasil to Cool Whip.

The fictionalized business-world flashbacks on "Mad Men" aren't just entertaining: From ketchup to cars to ladies' intimate apparel, they also provide real-world fodder for modern-day portfolios. Here's a look at a few great investment opportunities that are holding strong long after their talks with Don Draper's fictional advertising agency.

Heinz

The past few seasons of "Mad Men" have seen Pete Campbell and company lobbying for the affections of Heinz (HNZ) -- a ketchup, beans, and sauces company that's trying to differentiate itself from plain old ketchup.

Oh, what a difference a few decades can make. Now you pretty much can't go to a restaurant without seeing a bottle of Heinz ketchup at a table.

The company's financials are as delicious as its condiments, with revenue jumping from $10.7 billion in 2011 to $11.6 billion in 2012. It also has more than $1 billion in free cash flow and a fat dividend payout of 67 percent, which means there's still room for it to expand.

On top of everything, Heinz recently attracted superstar investor Warren Buffett. In February the Oracle of Omaha bought a huge stake in the business in partnership with 3G, a Brazilian private equity firm. Looks like things have turned out quite tastily for this ketchup company.

Maidenform

Peggy Olson -- a copywriter for Don Draper and every feminist's hero --gets one of her first cracks at advertising through writing a new pitch for Playtex. Playtex, meanwhile, only wants ads that look like those of popular intimate apparel brand Maidenform (MFB).

Several decades later, Maidenform is still going strong. However, Playtex -- which produces apparel as well as feminine- and baby-care products -- has disappeared from the public market, with its brand being licensed to other companies like Hanesbrands (HBI) to produce.

Still, in Maidenform we see a strong play for investors. The company offers an array of contemporary intimate apparel, and judging from some of its financial statements, this is still a business that knows what its audience wants.

Since 2008, annual revenue for the company has risen from $414 million to $600 million, a 45 percent increase. Maidenform also has a healthy $24 million in free cash flow. The company's total amount of assets ($436 million) more than doubles it total liabilities ($182 million). This is a brand that continues to stay stylish, even as times change.

General Motors

The latest big account Don Draper is trying to snag is that of Chevrolet, a brand owned by General Motors (GM).

Since it was founded in 1908, this company has stayed in the limelight as an eponymous American automobile icon. But, like the rest of the industry, it has been through a few close calls and several fender benders. The company had been part of the Dow Jones Industrial Average since 1925, but after the economic hardships of 2009, it was dropped like a heavy sack of car parts.

By November 2010, however, GM raised $20.1 billion and unleashed the biggest IPO in history at that time. But the obstacles weren't cleared yet. In July 2012, GM saw its stock reach an all-time low of $19.36, after a 6 percent decrease in overall sales. The company has since rebounded, however, and its price has risen a triumphant 63 percent.

During the past quarter, the U.S. auto industry enjoyed an overall gain in sales of 8.5 percent, and GM was one of many companies that benefited from the improvement. Its annual sales have risen 1 percent since last year, and if that sounds like a small number, look at it this way: It raked in $152.2 billion.

The Mad-ness of It All

We haven't heard the last of it from Don Draper, and fans can only speculate how his story, and that of Sterling Cooper Draper Pryce, will end. But we do know which companies survived the whiz-bang pace of the 1960s. And investors can use that knowledge to give their portfolios a bit of "Mad Men" pizzazz.

Motley Fool contributor Caroline Bennett has no position in any stocks mentioned. The Motley Fool recommends General Motors and H.J. Heinz. Try any of our newsletter services free for 30 days.

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