Here’s evidence that markets don’t value brands right

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Interbrand, a global brand consultancy, released its annual Best Global Brands report Monday, a study of the value of global brands—in dollar terms—to the companies that rely on them. The values assigned indicate a brand’s contribution to business performance.

Surprisingly the Interbrand analysis—which considers a brand’s financial performance, influence on consumer behavior, and staying power relative to peers—provides a contrast to the market’s valuations of them.

Coca-Cola is the 3rd most valuable brand according to Interbrand, but of the other top-ranked brands investors value the company as 8th with a market capitalization of $170 billion. Toyota is ranked 10th in brand value but 5th in market value.

“These intangible things are of significant value and should be taken into account” Interbrand CEO Jez Frampton told Quartz, referring to brands. “The way markets look at business is relatively short term.”

The ranking was limited to brands with worldwide investment, available financial information, and reliable profitability. Brands were viewed from a “consumer perspective.” As such, Mercedes-Benz was analyzed on its own accord rather than as a part of Daimler AG. Budweiser and Corona were analyzed and included separately even as both are products of Anheuser-Busch InBev. In some cases, popular brands were excluded for failing to meet the qualification criteria, such as Walmart, which does business around the world under different names (like Massmart in South Africa and Bharti in India.)

Of course there are other factors that provide value and create risk for investors—most simply reflected in the huge gap between brand value and stock market value. Interbrand is not claiming the value of a business is wholly contained in the value of its brand, but Frampton notes that even when a business is failing, the brand still has value.

Nokia for instance has a brand value of $7.4 billion according to Interbrand. Microsoft recently acquired the struggling smartphone division of the Finnish company for nearly exactly that amount—$7.2 billion. (Microsoft has a 10-year license to use the brand on mobile products as part of the deal.)

This is the first year Apple has occupied the top spot in the analysis. Coca-Cola reigned as most valuable for the past 12 years, since the report was initiated in 2000.

Apple, Google, Coca-Cola, and Microsoft top the Interbrand list, but the portion of their market value attributable to their brands is much lower. Toyota, GE, and Samsung have less of their companies’ value attributable to their brand’s equity. Their stock market value is each more than five times their brand value according to Interbrand.

US tech company HP—which has struggled financially over the last three years—has the lowest such ratio, with stock market value just 1.57 times brand value.

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