IBM, Johnson & Johnson and DuPont stand to profit from strong overseas sales as the greenback continues to fall. By Thomas M. Anderson, Contributing Editor November 6, 2007 The U.S. dollar has been so pathetic of late that supermodels diss it. Or at least one did. Brazilian supermodel Gisele Bundchen -- the world's richest catwalker at the moment -- wants her paychecks in any currency except the greenback, according to Bloomberg News. Hard to blame her. The dollar has fallen 34% against a basket of currencies since 2001 and trades near record lows against the euro and the Canadian dollar and near a 26-year low against the British pound. Few forecasters expect the greenback to rise for a sustained period any time soon because of huge federal deficits and expected interest rate cuts by the Federal Reserve. But what is bad for Gisele is good for a number of U.S. companies. A weak dollar means products manufactured in the U.S. are less expensive when purchased in other currencies. So U.S. exporters usually gain sales when the dollar slides. Plus, revenues generated by U.S. companies abroad are worth more when they are translated back into dollars. Here are three stocks of companies with hefty foreign sales that should continue to do well as the dollar declines. Advertisement IBM does a majority of its business outside the U.S. The red-hot economies of Brazil, Russia, India and China make up about 5% of IBM's total revenue of $96.2 billion, says American Technology Research analyst Shaw Wu, but sales in those countries are growing by 25% a year. "IBM will continue to benefit from hyper-growth" in so-called BRIC countries, he says. Wu expects Big Blue to generate growing sales and profits as customers from across the globe upgrade their servers to buy IBM's new processors. The stock (symbol IBM) fell 23 cents, to $113.17, on November 6. The shares trade at 14 times the $7.98 per share that analysts expect IBM to earn in 2008, according to Thomson Financial. Wu rates the stock a "buy" and thinks it is worth $150. Favorable exchange rates also have contributed mightily to sales growth at Johnson & Johnson. In the third quarter, J&J posted year-over-year sales growth of 13%, with 3 percentage points of that growth coming just from foreign currency benefits, says Morningstar analyst Heather Brilliant. International sales account for 47% of the $58.8 billion in total revenue over past 12 months. About 70% of J&J's products are first or second in their respective markets worldwide, Brilliant says. Advertisement In addition to a strong overseas presence, the company has increased its dividend every year for the past 44 years. At the November 6 closing price of $64.66, the stock (JNJ) yields 2.6%. It trades at 15 times the $4.42 per share that analysts expect the company to earn in 2008. That means that J&J's price-earnings ratio is roughly the same as the overall market's, a rare occurrence for a company of such high quality. Brilliant gives J&J stock a five-star rating and the thinks shares are worth $80. DuPont is also buoyed by its foreign operations. "Healthy international sales have more than offset weakness in the domestic housing and automotive markets," says Value Line analyst Michael Napoli. Even as sales dropped 1% in the U.S. over the past year, sales in Europe gained 11% and sales in the Asia Pacific region rose 7%. Meanwhile, sales in Canada and Latin American soared 22%. George Putnam, editor of The Turnaround Letter, a newsletter with a superb record of stock picking since 1986, notes that many DuPont products are used in agricultural, alternative energy and food-packaging industries. "DuPont has a stodgy image as a large chemical company, but in fact it has a very diversified product base," he says. DuPont stock (DD) scores high marks for safety and has a worthwhile total return potential for the coming years, Napoli says. At the November 6 closing price of $48.38, the stock yields 3.4%. It trades at 14 times the $3.43 per share that analysts expect the company to earn in 2008.