A decade is a long time to maintain a fast pace of growth. Yet it’s not impossible to find businesses that can grow at above-average rates for 10 years or more, buoyed by their strong competitive advantages. These stocks can deliver fortune-building gains to their shareholders.
Here are three competitively dominant companies with particularly attractive growth prospects. All three are likely to be lucrative long-term holdings for investors who buy today.
1. Walt Disney
Walt Disney (DIS -0.41%) is the epitome of an investment that can be held for many years. The media giant’s timeless collection of characters and storylines entertained families for generations. Meanwhile, Disney’s broad array of businesses helped it successfully weather all manner of market environments.
Disney owns a vast collection of nearly irreplaceable assets, including its renowned theme parks and resorts. Disney’s movie studios, broadcast and cable networks, and massive product licensing operations help to diversify its business, thereby lessening the risks for investors. Additionally, the company’s rapidly expanding streaming operations — which include its popular Disney+, Hulu, and ESPN+ services — add a powerful growth element to its portfolio.
Moreover, with Disney’s stock price down sharply during the recent bear market, investors can scoop up the entertainment titan’s shares at a heavily discounted price today.
Another surefire way to build lasting wealth in the stock market is to invest in the companies best situated to profit from powerful long-term trends. The global shift away from cash transactions and toward digital payments is a great example. Visa (V -0.25%) is set to be a prime beneficiary of this megatrend, making its stock an excellent candidate for buy-and-hold investors to consider.
Visa’s payment network spans more than 200 countries and territories. The payments colossus processed over $14 trillion worth of credit and debit card transactions in its 2022 fiscal year, which ended on Sept. 30. Visa earns a small fee from the transactions it facilitates, which collectively amount to tens of billions of dollars. Visa is also highly profitable, with net income of $15 billion in fiscal 2022.
Better still, Visa continues to grow at an impressive clip. Its revenue rose 22% to $29.3 billion and earnings per share climbed 24% to $7 in fiscal 2022. These figures should continue to head higher in the coming years, as more transactions flow to digital channels.
3. Chipotle Mexican Grill
Made-to-order menu items; fresh, high-quality ingredients; and fast service. It’s a simple yet elegant formula that’s served Chipotle Mexican Grill (CMG 0.80%) and its shareowners well since its initial public offering (IPO) in 2006. And it should continue to fuel the restaurant leader’s growth in the decade ahead.
Chipotle’s sales and profits grew briskly even as widespread inflation drove up raw material costs. That’s a testament to the company’s brand power and ability to raise prices, which helped to preserve Chipotle’s profit margins during a challenging macroeconomic environment.
Chipotle’s embrace of digital technology is another key reason for its success. Customers love its innovative mobile app, modernized drive-thrus, and convenient delivery offerings. Digital sales, in turn, now account for more than a third of Chipotle’s sales.
Management sees a long-term opportunity of at least 7,000 stores. With roughly 3,100 stores today and plans to open about 250 locations per year, Chipotle has at least a decade of rapid expansion still ahead. As its store count grows, the restaurant star should generate more sales and profits, delivering handsome returns to investors along the way.
Joe Tenebruso has positions in Walt Disney. The Motley Fool has positions in and recommends Chipotle Mexican Grill, Visa, and Walt Disney. The Motley Fool recommends the following options: long January 2024 $145 calls on Walt Disney and short January 2024 $155 calls on Walt Disney. The Motley Fool has a disclosure policy.